Financial services firms around the world are increasingly viewing cloud adoption as a driver of innovation rather than just a cost-saving tool.
A recent study by the London Stock Exchange Group (LSEG) found that financial institutions are now measuring cloud success based on scalability (51%), revenue growth (47%), and improved security and resilience (47%).
More than half (54%) report that they have already migrated to the cloud and are seeing tangible benefits in areas such as risk management, customer engagement, and enterprise data access.
Cloud is also becoming central to financial institutions’ artificial intelligence (AI) strategies. The majority (91%) are either using or planning to use cloud services to support AI initiatives within the next 12 months.
The top AI use cases cited were generative AI (60%), fraud detection (50%), and risk management (50%). Additionally, 84% of respondents considered their organisations somewhat or very advanced in AI adoption, with investment firms leading the trend.
“The results of our survey show that adopting cloud is no longer a technology- or engineering-led decision; it is a key business imperative,” says Stuart Brown, LSEG’s group head of data and feeds. “Companies are increasingly driving meaningful value from cloud, improving operational resilience, and preparing for the next wave of innovation. Over the next three years, that innovation will be driven by AI and machine learning, with financial institutions increasingly using cloud to power fraud detection, risk management, data analytics and generative AI.”
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The study also reveals that 82% of financial institutions now operate with either a multi-cloud or hybrid-cloud strategy, reflecting a shift toward greater flexibility and risk diversification.
However, the transition hasn’t been without challenges. More than four in five (84%) had to adjust their cloud strategies in response to regulations such as the EU’s Digital Operational Resilience Act (DORA) and the General Data Protection Regulation (GDPR).
Cybersecurity remains a top concern, too. Nearly half of respondents (47%) cited the increasing sophistication of cyberattacks as their primary worry, followed closely by data privacy and breach risks.
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Moreover, 92% of financial institutions say operational resilience is a critical or very important factor when choosing a cloud provider. This highlights the importance of trust and reliability in vendor partnerships.
As firms look ahead, many are rethinking their preferred cloud service models. While Software as a Service (SaaS) remains the most widely used (43%), there is growing interest in Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). This signals that financial institutions may be preparing to build more bespoke applications in-house.
