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Cloud Technology Blog for RIAs and Broker-Dealers

Finance Teams Seeking New Heights With Cloud Software

7/5/16 4:00 PM / by Sam Attias

Big banks are not the only ones taking a stronger interest in the cloud.


Cloud-based platforms are on the rise among both large banks and the financial departments of North American companies. Higher regulatory hurdles and staffing costs are a big factor, according to recent news reports. But so is a growing sense of comfort with the technology on the part of business leaders.

Successful bosses at RIAs and broker-dealers have been known to track technology trends unfolding at national and global corporations. In addition to gaining insights about innovative operational processes, wealth management leaders can strategize about how to adapt the most suitable of them for their firm’s needs.

Cross-Sector Popularity

A report released last month by the Robert Half company and the Financial Executives Research Foundation surveyed more than 1,700 executives from public and private firms across industry groups in North America. It found that 62% of U.S. respondents said their firms either use cloud software or plan to start, up from 51% last year. That might be because 68% of U.S. firms surveyed expect their compliance burden to rise during the next three years.

About 30% of firms surveyed with under $25 million in annual revenue use some cloud solutions for their financial functions, compared with 51% of firms surveyed with $1 billion to $4.9 billion in annual revenues. Within cloud-using firms with under $25 million in revenues, the median firm surveyed allocated about 50% of its financial system to cloud solutions. For cloud-using firms with between 1$ billion and $4.9 billion in revenues, the median firm surveyed allocated 10% of its financial system.

Big Banks, Big Plans

Deutsche Bank, meanwhile, has drawn up detailed plans for expanding the firm's commitment to public cloud usage, and its peers have taken concrete steps to boost their reliance on big vendors such as Amazon Web Services and Microsoft’s Azure. Doing so could reduce expenses at the banks by huge sums.

Not only is it foreseeable that financial institutions will take action in 2017, argues Deutsche Bank, but within three years so-called “infrastructure as a service” – which uses cloud platforms to deliver virtual computing through a web interface – may go from being nonexistent to comprising 30% of the IT at some companies. Indeed, FINRA already runs 90% of its data, such as market intelligence analysis, in the cloud.

Safety in Specialization

However, decision makers at RIAs and small-to mid-sized broker-dealers frequently express concerns that mass market cloud providers may lack sufficient familiarity with the wealth management industry. Indeed, widespread adoption of cloud software by financial professionals could depend on the ability of providers to tailor those tools for the needs of specific subsectors.

Breakaway financial advisors who have just left a wirehouse to start their firm, for instance, may need help integrating the proper CRM, portfolio management and business administration tools with their operating system in a manner that offers robust cybersecurity. Since most wirehouse brokers are not specialists in wealth management software, if something goes wrong at work, they should have access to round-the-clock IT support from precisely those kinds of experts.

Comparison Shopping

If you’re on the market for the best cloud platform, your wealth management firm deserves subsector-specific guidance.

Knowledge of SEC and FINRA regulations on cybersecurity, data protection and recordkeeping is essential. The Securities and Exchange Commission is enhancing its data management systems in order to keep up with evolving industry conditions. Meanwhile FINRA is fining broker-dealers for shoddy policies.

Any vendor also should have expertise in overcoming the IT challenges of new RIAs and rapidly expanding broker-dealers, as well as familiarity with disaster recovery and business continuity plans relevant to wealth management.

A proper cloud platform does more than host your system over the Internet – it supports your complete IT infrastructure, and your business.

Topics: Financial Services, Cloud Desktop, Cybersecurity, Cloud Computing, Technology

Sam Attias

Written by Sam Attias

Sam Attias is Managing Director of External IT. He has more than 15 years of experience in the industry including in the areas of Wealth Management, Investment Banking, Fixed Income and M&A.