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Unveiling Trends: Cloud in Financial Services

On 14th November 2023, Reply hosted a Cloud in Financial Services breakfast briefing, delving into the evolving landscape of cloud technology in the financial sector. The event featured an overview of the 2023 survey, and a panel discussion exploring perspectives from EU regulators, cloud service providers, and consultancy experts.

The 2023 survey unveiled

Reply, in collaboration with the European Banking Federation, Insurance Europe, and Professors from Imperial College Business School London, and the University of California, Santa Barbara, presented its 2nd annual survey on Cloud in Financial Services. A comparative analysis with the 2021 survey revealed the following trends and shifting perspectives shaping the industry:
  • Cost advantage perception decline: Financial institutions showed a decline in viewing cost advantages as the primary benefit of cloud adoption, the key reasons for this include: an inability to retire legacy on-premises data repositories/applications as quickly as anticipated, a higher use of cloud computing resources than anticipated, and an inadequate cloud cost management discipline.
  • Enhanced system resilience recognition: The survey highlighted a substantial increase in the recognition of cloud technology's ability to enhance system resilience. As financial institutions grapple with increasing complexities, the cloud is widely regarded as bolstering resilience.
  • Accelerated implementation perceptions: The perception of cloud technology expediting implementation processes has shifted significantly. Down to 37% in 2023, compared to 51% in 2021. This suggests that other aspects are more important in terms of value.
  • Regulatory compliance and data sovereignty challenges: Despite advancements, regulatory compliance and data sovereignty remain formidable challenges. 81% of financial institutions continue to grapple with these challenges in 2023, highlighting the complexities associated with aligning cloud strategies with regulatory requirements.
  • Escalating concerns over unforeseen costs: As alluded to above, the survey brought attention to a growing concern within the industry – the escalation of unforeseen costs in cloud services. As financial institutions navigate the cloud landscape, cost management and FinOps capabilities emerge as critical factors for long-term sustainability.
  • Financial institutions welcome regulatory oversight: Three-quarters of financial institutions expressed a welcoming stance towards regulatory oversight of cloud service providers. This stems from the fact that such oversight would give senior management confidence in the reliability and security of cloud solutions.

Panel discussion insights

The panel discussion featured Alex Hammond (Partner, Airwalk Reply), Ksenia Duxfield-Karyakina (Public Policy & Government Relations Manager, Google Cloud Europe), and Dimos Karalis (Policy Adviser, European Banking Federation), several key points were highlighted:
  • Challenges in multiple cloud regulatory frameworks: The panel acknowledged the challenges that UK companies will continue facing in navigating multiple cloud regulatory frameworks specific to the financial sector. Reconciling the convergence of these frameworks will no doubt be a challenge for effective adoption.
  • Balancing regulation vs. innovation: The panel addressed the delicate balance between adhering to regulations and fostering innovation within the financial sector. There was consensus on the importance of regulations supporting, rather than hindering, technological advancements.
  • Data sovereignty vs. innovation: Ksenia Duxfield-Karyakina shared Google's perspective on data security, emphasising its importance over the physical location of data. The discussion touched upon the ongoing debate of data sovereignty versus adopting an effective cloud-native strategy.
  • Regulation keeping pace with technological innovation: Dimos Karalis posed a fundamental question about the ability of regulation to keep up with the rapid pace of technological innovation in a meaningful and enabling way. This highlights the need for adaptive and fit-for-purpose regulatory frameworks in the ever-evolving digital landscape.
  • Satisfying regulatory requirements: Alex Hammond emphasised the importance of a collaborative approach between UK regulators and organisations for satisfying regulatory requirements. Rather than a strict command and control approach, it would also be beneficial for supervisors to play an active role in guiding and advising organisations toward compliance.
  • The future landscape: The panel concluded by discussing the future landscape, highlighting key themes such as the adoption of multi-cloud strategies, the increasing significance of cybersecurity, and the potential impact of quantum computing on the financial services industry. The panel discussion highlighted the intricate challenges and considerations surrounding the intersection of cloud technology and financial regulations. From the complexities of multiple frameworks to the ongoing dialogue about data sovereignty and innovation, the conversation underscored the need for collaborative, adaptive approaches to shape a resilient and innovative future for the financial services sector.


As the financial services industry continues its journey into the cloud, the findings from Reply's 2023 survey and the discussions at the Cloud in Financial Services breakfast briefing underscore the nuanced nature of this transformation. Navigating challenges such as regulatory compliance, cost management, and system resilience requires a collaborative and strategic approach from all industry stakeholders.


To download your copy of the Cloud in Financial Services 2023 report click here