Technology continues to pace the evolution of markets. But for financial market infrastructures (FMIs), cloud transformation can be challenging to assess using a traditional total-cost-of-ownership (TCO) framework. In a new paper from Celent, commissioned by Nasdaq, a rethought TCO equation is argued for that captures the holistic costs of FMIs “standing still.”
Capital markets are evolving, competitive and regulatory pressures are growing, and new business opportunities are becoming available. The common denominator among them is technology, and FMIs are looking at cloud to improve scalability, resilience, analytics and client experiences, among other areas.
As they consider next steps, FMIs should look beyond lift-and-shift approaches in favor of embracing a cloud operating model. The TCO calculation for this business transformation, however, can look expensive versus existing on-premises solutions. But the unique factors affecting FMIs require a more refined equation that accounts for opportunity costs of FMIs doing nothing while markets and members pass them by on their technology journeys.
Capital markets are evolving, competitive and regulatory pressures are growing, and new business opportunities are becoming available. The common denominator among them is technology, and FMIs are looking at cloud to improve scalability, resilience, analytics and client experiences, among other areas.
As they consider next steps, FMIs should look beyond lift-and-shift approaches in favor of embracing a cloud operating model. The TCO calculation for this business transformation, however, can look expensive versus existing on-premises solutions. But the unique factors affecting FMIs require a more refined equation that accounts for opportunity costs of FMIs doing nothing while markets and members pass them by on their technology journeys.
Listen to Monica Summerville, Head of Capital Markets, Celent, explain more about cloud trends in the financial services space as she dives into the TCO research, the unique position of FMIs and the cost of maintaining the status quo bias.
People struggle with the costs of legacy technology and that has not come through [in costs analysis around cloud]. Legacy infrastructure can be extremely high risk and costly, there are dependencies on key staff, lack of support for new regulation, etc. All of this requires modern thinking.”
Learn more about the FMI-specific TCO formula in Celent's report "FMIs and Cloud: Building the Business Case".
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For the past 50 years, Nasdaq has strived to reimagine markets to realize the potential of tomorrow. With disruption in our DNA, we view technology as the conduit to greater opportunities, everywhere.
Based on lived experience in migrating three markets to the Cloud and on insights and observations gathered from delivering mission-critical market infrastructure solutions worldwide, Nasdaq has compiled a new viewpoint paper aimed at providing the 2024 Outlook for Cloud in Market Infrastructure.
