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©2014 Aite Group LLCPage 1 Page 1

Floating in the Capital Markets Cloud: Moving Beyond Data Storage

May 2014

©2014 Aite Group LLCPage 2

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• Survey background• Report highlights• Conclusion


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Aite Group interviewed 21 mostly broker-dealers globally…

Broker-dealer/investment

bank85%

Asset manager10%

Exchange/ATS5%

Breakdown of Respondents(n=21)

Source: Aite Group survey of 21 capital markets participants, March and April 2014


Survey firms represented global operations

86%

76%71%

52%48% 48%

33%

Developed Asia-Pacific

Developed Europe

North America

Emerging Europe

Emerging Asia-Pacific

Latin America

Middle East/Africa

Q. You firm currently operates in...(n=21)



Surveyed firms were also active users of multiple asset classes…

90% 90%

86% 86% 86% 86%

81%

Q. Does your firm currently use...(n=21)



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Industry focus on regulations, cost, and clients…

29%

52%

62%

71%

81%

Geographic expansion support

Internal efficiency improvement

Client support

Cost control

Regulatory compliance

Primary Strategic Technology Investment Drivers for Business in 2014(n=21)



Even split between cloud adopters and doubters

Yes52%

No48%

Q. Does your firm currently have cloud initiatives in place?(n=21)



Of the cloud adopters, preference for private or hybrid approach

Public cloud37%

Private cloud27%

Combination of both36%

Type of Cloud Services In Use(n=11)



Concerns over security still a major obstacle for most firms considering cloud

90%

50%

40%

30%

30%

10%

Concerns over security

Lack of control

Performance issues

Reliability and availability

Regulatory restrictions on data storage

Other

Concerns about Cloud Initiatives(n=10)



For those cloud doubters, good chance they will embrace cloud services over the next 24 months

No chance20%

Somewhat likely40%

Likely30%

Highly likely10%

Q. Chances that your firm will leverage cloud services over the next 24 months(n=10)



Scalability and TCO reduction key to cloud adoption

2

2

4

3

4

3

3

5

4

4

3

7

5

3

2

2

2

Reducing TCO

System scalability

Disaster-recovery and …

Faster time to market

High availability

Moving from capex to opex

Q. Rank the importance of benefits that you may get from the cloud(n=11)

Not important Important Very important



Cost reduction key driver for cloud-based data initiatives

10%

10%

10%

19%

19%

24%

24%

29%

29%

29%

48%

Other

Need for a more structured approach to …

Strategic consolidation post-merger

Coping with a greater variety of …

Risk management function support

Regulatory initiatives

Migration from legacy systems

Client data focused initiatives

Strategic data quality related programs

Desire to rationalize data feeds/vendor …

Cost reduction

Q. Which factors have or are likely to influence your use of cloud technology for data?

(n=21)



Cloud adoption moving from data storage and management to more compute-intensive areas…


9%

18%

18%

18%

27%

27%

36%

36%

64%

Quantitative research


Risk management

Trade analytics

Trading infrastructure

Strategy development and testing

Other*

Positional or transactional data storage

Reference or market data management

Areas of Focus for Cloud Initiatives(n=11)

*Other includes email, call center, HR, legal, technical projects, etc.


How to leverage the cloud for data management

5%

5%

10%

14%

29%

29%

48%

48%

62%

Providing a better front end

Support for bitemporality

Other

Adequate downstream support

Basic support for key reference data sets …

Facilitating global data integration

Providing better monitoring tools and data …

Operational risk control

Scaling to meet future requirements

Q. Which aspects of data management in the cloud offering are the most important for your firm?

(n=21)



Data management and trade analytics, continued focus of the future

5%

14%

14%

19%

19%

19%

24%

29%

43%

Trading infrastructure

Strategy development and testing


Risk management

Other (Please provide)

Quantitative research

Positional or transactional data storage

Trade analytics

Reference or market data management

Future Focus Areas for Cloud Initiatives(n=21)



The appeal of cloud for data managers

• A rapid way to reduce costs via the removal of duplicative processes at an enterprise level and the elimination of the requirement to support internally deployed software and hardware

• Predictability in ongoing costs• Scalability in dealing with a higher volume of data in a timely

fashion without requiring internal investment• Ability to have a centralized point for the metering and

permissioning of data vendor feeds across an enterprise—a way to rationalize data feeds and improve vendor management via increased transparency of consumption at an enterprise level


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Conclusion

• Regulatory compliance, cost control, and client management are the top three drivers for strategic IT investment

• Focus on cost savings, scalability and facilitating high performance computing key drivers for cloud adoption in capital markets

• Market participants are looking to leverage cloud-based services for data management and increasingly in risk management and trade analytics.

• Data as a Service (DaaS) is the growing concept that data is provided on-demand to the end user and the service provider is responsible for all data cleansing and management functions.


Aite Group: Partner, Advisor, Catalyst

Aite (pronounced “eye-tay”) Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry.

Virginie O’SheaSang Lee+1.617.338.6050www.aitegroup.com

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Documents

aite group llcpage

aite group survey

capital markets participants

capital markets cloud

cloud source

survey firms

cloud adoption source

data management source