Lower margins resulting from both the commoditization of transaction economics and the high cost of supporting IT-intensive infrastructures are putting tremendous pressure on financial-market companies. This is causing many firms to rethink their business models to create new revenue streams—and reduce costs—across traditional functions such as pre-trade analytics, risk management, and post-trade reconciliation. These functions are now seen as critical business processes that can be “shifted and lifted” into a cloud-enabled service delivery model.
Key enablers of success will include the development of new cloud operating models and strategic sourcing capabilities delivered via networked services. This will provide financial-market companies with greater business agility, and a path for effectively shedding capital-intensive assets from balance sheets for re-investment in new innovations and for producing positive company valuations.