TLDR: A recent global survey by LSEG (London Stock Exchange Group) indicates that 87% of financial services firms have significantly increased their cloud investments over the past two years, shifting focus from mere cost reduction to achieving strategic outcomes like enhanced scalability, revenue generation, and AI integration. The report highlights that AI and machine learning, including generative AI, are poised to drive innovation in critical areas such as fraud detection and risk management within the next three years.
London, UK – A new global survey conducted by LSEG (London Stock Exchange Group) reveals a profound shift in how financial services firms are leveraging cloud technology. The comprehensive research, which polled 453 financial services executives worldwide, indicates that cloud adoption is no longer solely about cost efficiency but has become a core strategic imperative for driving competitiveness and innovation.
The survey found that a remarkable 87% of financial services firms have escalated their cloud investments in the last two years. This surge in investment is driven by a desire to achieve strategic outcomes, including improved scalability, accelerated revenue growth, and the crucial enablement of Artificial Intelligence (AI) capabilities. The findings underscore a maturing understanding of cloud’s potential beyond traditional IT infrastructure benefits.
Stuart Brown, Group Head of Data & Feeds at LSEG, emphasized this strategic evolution, stating, “The results of our survey show that adopting cloud is no longer a technology or engineering led decision; it is a key business imperative. Companies are increasingly driving meaningful value from cloud, improving operational resilience, and preparing for the next wave of innovation.” Brown further highlighted the pivotal role of AI, noting, “Over the next three years, that innovation will be driven by AI and machine learning, with financial institutions increasingly using cloud to power fraud detection, risk management, data analytics and generative AI.”
The report also sheds light on the prevalent cloud strategies within the sector, with 82% of firms now operating with either a multi-cloud or hybrid-cloud approach. This reflects a strategic move towards greater flexibility and risk diversification. However, this rapid adoption is not without its complexities; 84% of respondents reported having to adjust their cloud strategies in response to evolving regulatory frameworks, such as the EU’s Digital Operational Resilience Act (DORA) and the General Data Protection Regulation (GDPR).
Despite the clear benefits, security remains a paramount concern. Nearly half of the surveyed executives (47%) identified the sophistication of cyberattacks as their primary worry, closely followed by anxieties surrounding data privacy and breaches. Nevertheless, operational resilience is a critical factor in cloud provider selection, with 92% of firms deeming it either critical or very important, underscoring the demand for trustworthy and reliable cloud partnerships.
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In terms of tangible benefits, 54% of respondents reported already seeing positive outcomes from their cloud migration efforts. While the focus has shifted, cost reduction remains a factor, with 61% indicating that cloud adoption either significantly or marginally reduced the total cost of ownership (TCO) of their IT infrastructure. On average, 34% of IT and data budgets are now allocated to cloud services, signaling a substantial commitment to this transformative technology.
