.jpg)
OneMarketData, a leader in tick data management and analytics, today issued the results of an industry survey looking at current and planned cloud technology usage trends to support the quantitative research and trading process.
The survey revealed a significant level of interest in using cloud for data-heavy services, the top three being Transaction Cost Analysis (TCA), trading model back-testing and quant research. Participants also indicated that they do not foresee the use of cloud technology to support trade execution.
The OneMarketData survey asked financial market participants from the buy side and sell side, as well as financial experts from academia, about their current and planned use of cloud technology and services for trading and investment decisions. The results of the survey point to an increased demand for cloud technology services in financial markets supporting the trade life cycle.
Data storage topped the list of services most appropriate for cloud computing solutions. Large scale trade model back-testing, quantitative research and TCA/post-trade analytics were each chosen as cloud appropriate by more than 60 percent of respondents.
Considering the many benefits of the cloud, lowering costs had the greatest appeal for survey respondents. An impressive 96 percent indicated that the reduced costs associated with the cloud have driven adoption in the capital markets. The second biggest driver, according to 52 percent of respondents, is scalability of compute power.
The market remains hesitant, however, on the adoption of cloud services for trade execution, particularly on public cloud solutions. Almost three-quarters of respondents said they are not currently leveraging the public cloud for trading purposes, and only 13 percent said they consider cloud, public or private, as an appropriate technology model to support trade execution.
Nonetheless, an impressive 70 percent of respondents said cloud services have evolved to warrant consideration for use in the capital markets. An additional 75 percent of respondents said they expect to increase their use of cloud in the coming year.
Yet with all the fervor toward increased adoption, there are still barriers ahead in capital markets. 61 percent of respondents named concerns over and limitations of security, control, flexibility and support. Performance and latency concerns, such as virtualization overhead, came in as the second barrier at 50 percent.
“There is a clear indication that firms are ready to move research, model back-testing and TCA into the cloud,” said Louis Lovas, director of solutions at OneMarketData. “These survey results point to an expansion of the industry’s use of cloud technology for the computational scale it offers, though it seems clear that some functions, like trade execution, will continue to be run on proprietary infrastructure for the foreseeable future.”
To review the survey results in full, please click here.
