The Depository Trust & Clearing Corporation (DTCC), which already hosts some applications in the cloud, said cloud computing has now "moved past a tipping point" whereby it offers greater benefits and fewer risks to traditional outsourcing arrangements.
Financial services and technology law expert Luke Scanlon of Pinsent Masons described DTCC's move as a sign that the barriers that dissuade many financial firms from utilising cloud-based solutions are diminishing.
"The DTCC, after a period of testing and detailed analysis, have here highlighted that some of the traditional reasoning as to why cloud services present significant risk – such as concerns around security – are no longer valid," Scanlon said.
"In 2017 we are certainly seeing a maturing of the discussion and more and more of a focus on the few remaining regulatory sticking points to cloud adoption, together with the practical concerns around achieving the levels of availability necessary to operate the core systems of financial institutions and utilities, liability and exit arrangements," he said.
In a new white paper it has published, which contained its strategy to leverage the cloud, the DTCC explained why it will move more of its applications and services into the cloud.
"DTCC has been leveraging cloud services for almost five years and believes the cloud represents a viable alternative to corporate data centres," it said. "The maturation, expanded offerings and enormous scale of the technology, resolve the privacy and security challenges of cyber-threats, potential flash crash type market disruptions and the cost challenges facing many financial firms today."
"DTCC believes cloud computing has moved past a tipping point, prompting the firm to pursue a strategy of building a cloud ecosystem with partner vendors that support best practices and standards. DTCC is taking this step because it is confident that the security, scalability, resiliency, recoverability and cost of applications in the cloud are better than almost any private enterprise could achieve on its own," it said.
"DTCC also believes that business services, delivered by applications written to take advantage of the infinite resources, resiliency, and global reach of the cloud, have a significant advantage over legacy applications using traditional models in private data centres. We believe that gap will continue to widen over time," the firm said.
DTCC said it plans to work with regulators to ensure that its cloud-based operations are compliant with "the highest and strictest levels of recommended controls and best practices" it is subject to.
Earlier this year, seven main hurdles to banks' adoption of cloud-based services were highlighted in a joint report by Pinsent Masons and UK banking industry body the BBA.