A recent survey from the London Stock Exchange Group reveals a major shift in the financial services sector towards cloud adoption, with 87% of firms increasing their cloud investments over the past two years.

Today, 82% of these companies operate with hybrid or multi-cloud strategies to boost flexibility, reduce concentration risk, and ensure compliance with global regulations.

The survey, which included responses from over 450 firms, shows that cloud technology is now viewed as a strategic tool for enhancing agility and fostering innovation, not just cost savings.

Stuart Brown, Group Head of Data & Feeds at LSEG, emphasizes that cloud adoption has become a critical business imperative, enabling firms to improve operational resilience and prepare for AI-driven innovations.

Several banks, including LSEG itself, have entered into significant cloud agreements, such as extending its multi-year collaboration with Amazon Web Services (AWS) in April, highlighting industry momentum.

Looking ahead, advancements in AI and machine learning over the next three years are expected to further influence cloud usage, especially in areas like fraud detection, risk management, and data analytics.

While SaaS remains the dominant cloud model at 43%, there is growing interest in Platform as a Service (PaaS) and Infrastructure as a Service (IaaS), indicating a shift towards developing customized in-house applications.

This rising interest in PaaS and IaaS suggests that firms are increasingly seeking to build tailored tools to meet evolving needs in AI and compliance.

An impressive 91% of firms are either using or planning to use cloud services for AI initiatives within a year, focusing on generative AI, fraud detection, and risk management.

Security remains a top concern, with 47% of respondents citing sophisticated cyberattacks as their primary worry, yet 92% prioritize operational resilience when choosing a cloud provider.

Despite security concerns, the industry recognizes that cloud adoption is fundamental for long-term digital transformation, emphasizing resilience, AI readiness, and regulatory compliance.

However, 84% of firms acknowledge the need to adapt their cloud strategies due to regulations like the EU’s Digital Operational Resilience Act and GDPR, highlighting ongoing compliance challenges.