Cloud migration – Building the AI advantage in capital markets

Across the buy and sell sides of the capital markets, more organizations are helping money work harder by migrating their systems to the cloud. In doing so, they lay the groundwork for long-term competitive advantage.

How does cloud architecture drive success in capital markets?

For capital markets firms, from investment banks and traders to asset managers and servicers, moving to the cloud has been instrumental in boosting operational speed, efficiency and control.

These organizations operate in a complex world. But in the face of volatile, highly regulated markets, increasing cost pressure and rising customer expectations, adopting modern cloud-native solutions makes it simpler to conduct business.

With a cloud architecture, it is easier to consolidate your tech stacks, reduce the number of vendors you work with and minimize friction between your teams. In turn, you’re able to streamline your processes and unify your data across your operations to minimize reconciliation challenges and accelerate decision-making.

Ultimately, you can seamlessly automate more processes with advanced technologies like AI and further enhance efficiency, control and insight along the way. That makes the cloud more than an operating model and, in fact, an important catalyst for change, modernization and growth.

Why is cloud migration essential for innovation in capital markets?

Today, it is almost impossible to innovate without the cloud as your operational foundation. To compete in a crowded market, you need to be able to integrate and use emerging technologies quickly so you can adapt cost-effectively to the next customer or regulatory requirement.

The cloud gives you that agility, and without it, you may struggle to implement a sophisticated AI strategy or take advantage of powerful new capabilities for predictive analytics.

Whether to reduce the number of end-of-day breaks in securities processing, accelerate the administration of complex loans or gain an aggregated view of global regulations, AI helps your competitors take efficiency and data analysis to new heights.

But not all organizations are up to speed with AI. According to new research by FIS®, their technology landscape is often to blame. In our Harmony Gap survey of more than 500 C-suite executives and fintech decision-makers across the U.S., the U.K. and Singapore, a significant 29% of firms say they don’t have the scalable infrastructure they need to develop and deploy powerful AI models. The kind of infrastructure that you’ll only find in the cloud.¹

What challenges do capital markets firms face with cloud migration?

Despite the clear advantages of cloud-based operations, the Harmony Gap research reveals that only 33% of capital markets firms – compared to 49% of banks – have reached the scaling stage of a cloud migration or carried out a full-scale implementation of cloud computing.¹

There are good reasons behind this lag. Historically, the capital markets industry as a whole has been incredibly fragmented, which has led to a massive proliferation of individual solutions for different asset classes, customer types, regions and regulations.

As a result, a Tier 1 capital markets firm could have as many as 100 processing solutions in place globally, with a spaghetti of integrations that is difficult to untangle and a considerable amount of technology debt to pay off.

In recent years, capital markets organizations have also been under a lot of regulatory pressure. In combination with high inflation and rising operational costs, this has drained their resources and limited the investment dollars and personnel available for multiyear cloud migration projects.

But at the same time, firms are struggling to home in on their core competencies and continuing to invest a lot of time and money in developing their own technology. For example, 22% of financial services firms in the FIS survey say they are still building software in-house, rather than buying a tried and tested system from a vendor.¹

Even if an in-house IT team can bring an effective solution to market, there are ongoing overheads to consider of running it, maintaining it and keeping it up to date with industry and regulatory changes. These are costs that scalable cloud solutions from well-established technology providers will absorb as a matter of course.

How are capital markets firms shifting their mindset on cloud adoption?

The tide, however, is turning. Compared to just 47% of banks in the Harmony Gap survey, a full 56% of capital markets firms now say they plan to increase their investment in cloud technology.¹

Previous fears over the safety and privacy of data in the cloud have dissipated as cloud providers demonstrate not only their strong commitment to security, but also their ability to meet data sovereignty requirements.

Given the rise of regulations like the Digital Operational Resilience Act, the priority for most companies now is operational resilience. But here, again, robust and scalable cloud architectures prove to be better able to deal with volatile market conditions than legacy on-premises technology.

Regionally speaking, European firms look to be the most advanced in their cloud migration. In the FIS survey, 40% of organizations in the U.K. have adopted cloud computing to date, compared to 36% in the U.S. and 30% in Singapore.¹

We shouldn’t be surprised at this disparity. As a fragmented region in terms of financial services systems and processes, Europe has a more urgent need for consolidation – a need that its firms have been relatively fast to meet with scalable, streamlined cloud environments.

What does the future of cloud and AI in capital markets look like?

As cloud models evolve, they are taking more and more pressure off capital markets technology users and helping them focus increasingly on their core competencies.

Software-as-a-service models allow firms to access and integrate new software solutions quickly with fewer support and maintenance requirements. As upgrades happen automatically, clients across the industry are also typically on the latest version.

Some of the largest organizations may always choose to keep their data on-premises. But as time goes by, the cloud is likely to become the default mode of operation for most capital markets firms – the only way to keep innovating and stay on top of costs and ahead of competitors.

For FIS, the cloud is fundamental to our strategy of building end-to-end, front-to-back ecosystems of solutions for our clients, powered by AI and advanced analytics.

We’ve developed, for example, an investment data platform that aggregates big data from across the industry and the world to inform and accelerate investment decisions. We’ve also invested heavily in AI and machine learning to supercharge risk management, loan administration and cash flow forecasting processes.

The possibilities are endless, and cloud computing is the starting point for all that is to come in the future. The cloud is the foundation. Unified data is the next level. And AI will help you reach the peak of your powers.

¹FIS, The Harmony Gap: Finding the Financial Upside in Uncertainty (with Oxford Economics), May 2025