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Data technology walkway

How hybrid cloud is transforming finance

Why firms are turning to a blended solution


July 2022

Leon Liang Headshot
Leon Liang

Director - APAC Feeds Business Development, ICE

The advantages of cloud computing for financial services firms are well understood — instant scalability, improved resiliency and cost. But downsides remain for the public cloud: jurisdictional and regulatory issues, data security and privacy concerns.

Many institutions are turning to a blended solution to address these concerns, using the strengths of both private and public cloud computing.

This is known as a hybrid cloud - and its adoption is transforming banking.

As recently as five years ago, regulators were reticent about sensitive data being hosted in public clouds, potentially in another country. They were grappling with multi-jurisdictional sensitive information rules and what data could leave one region and move to another.

These were important questions. Many countries had rules barring client information from being sent overseas.

The advent of the hybrid cloud offered a solution.

A combination of private and public cloud services within a firm helps to address regulatory pressures, allowing sensitive data to be stored locally while using the power of public cloud computing for applications and non-sensitive information.

The pandemic has also fueled cloud adoption. Cloud computing is ideal for helping people work from home, replacing the need for hardware that is physically needed on premises. In addition, financial firms have sought to improve automation and reduce human error, where public cloud native applications can help with functions, including faster data analysis.

Cloud computing has a long history.

Not long after businesses first started using computing, they realized it was more economical to share access across users and applications rather than provide dedicated machines for every task.

This shared-access model was accelerated by the internet, which made it possible for computing power to be located away from a business’s premises and shared across unrelated users.

The big, brand name public clouds are sold by companies like Microsoft, Alibaba, Tencent, Amazon and Google. They allow users to buy time, bandwidth and computing resources on an as-needed basis, sharing the underlying systems with millions of other users.

For users, this means public clouds can help to deliver considerable benefits including costs savings, scalability and improved resiliency.

In contrast, a private cloud is dedicated to a ring-fenced group of users and systems. It can be physically located on a company’s premises or hosted by an external provider and offers many of the benefits of a public cloud plus additional control, security and privacy.

Hybrid cloud: the best of both worlds?

The newer hybrid cloud, as the name suggests, is a combination of the two; allowing data and applications that need to be kept secure leveraging private cloud to interact with public facing websites and services hosted in a public cloud.

This allows financial services companies, for example, to store client information in an application on a private cloud in order to comply with applicable regulatory requirements, while having market data and other non-sensitive applications accessible by its users on a public cloud.

Cloud computing is expanding in financial services across North Asia. In part, clearer regulatory guideline are driving the change*, including a standardization of the rules applicable to public cloud, private cloud and on-premises solutions.

The trend appears to be accelerating as financial institutions weigh up the ever-increasing costs of maintaining their own IT hardware with dedicated resources against handing this burden over to the public cloud providers.

At ICE, we are seeing more financial institutions move their quantitative research, risk management and back-office applications to a cloud environment.

And it’s not just cost.

The public cloud providers have developed services that allow financial institutions to conduct analytics and reporting.

Even trading and managing core banking services can now be operated in a public cloud, offering more locations, more computing power and more storage to users.

ICE is playing a role too and can deliver real-time market data into public, private and hybrid cloud environments across the world through ICE Cloud Connect.

We use sophisticated third-party networking providers that allow us to connect cities, countries and continents seamlessly and instantly, while respecting local regulations and data security laws

Since launching cloud-based access to streaming, low latency market data, ICE has connected to more than 50 financial institutions using public cloud services for trading or trading related purposes, with increasing presence from China’s giant Alibaba Cloud and Tencent Cloud in North Asia.

These connectivity services are also helping a new trend gain acceptance — the multi-cloud.

As the name suggests, multi-cloud solutions allow financial institutions to host their data and applications across different cloud providers, ensuring availability even if one cloud provider experiences downtime.

At ICE, we have seen the multi-cloud approach being adopted quickly by a growing number of large international banks and investment firms.

ICE is supporting this growth with multiple cloud-connected physical data centers across different regions connected by high-bandwidth, low-latency fiber cable.

New customers can be onboarded in days or weeks instead of months, with a simple configuration connecting to their own systems — whether on-premises, private-, public-, hybrid- or multi-cloud.

This can dramatically reduce the costs of onboarding a new customer as opposed to making physical connections. More broadly, as cloud solutions continue to evolve, the ability to better manage cost, security and flexibility around data storage will offer many firms a competitive edge.

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Related Content


  • Cloud adoption has been fueled by the pandemic as firms seek to improve automation and reduce human error. More financial institutions are moving their research, risk management and back-office applications to a cloud environment
  • A combination of private and public cloud (hybrid cloud) can allow firms to store sensitive information on a private cloud to comply with regulation, while having market data and non-sensitive applications accessible on a public cloud
  • Many international banks and investment firms are using multi-cloud solutions - hosting data and applications across different cloud providers, to ensure availability if one cloud provider experiences downtime
  • ICE can deliver real-time market data into public, private and hybrid cloud environments across the world through ICE Cloud Connect