According to a report from Markets and Markets, the financial services cloud market is set to reach a total market of $29.47 billion by 2021, growing 24.4 percent.

The study further found that most of this growth will be right here in North America. At the forefront of this trend, Capital One has made public declarations around their all-in cloud, all AWS strategy. Their significant presence on the expo floor at AWS re:Invent was further evidence of this commitment. The growth of cloud adoption in this sector is driven by a simple truth: Financial services are being transformed by the cloud.

Key Takeaways

  • The financial services cloud market was projected to reach $29.47 billion by 2021, growing 24.4% — with most of that growth concentrated in North America.
  • Capital One publicly committed to an all-in, all-AWS cloud strategy, signaling the shift was already underway among industry leaders.
  • Many financial services firms still run legacy systems — including decades-old mainframes — alongside modern technology, making transformation feel daunting but increasingly urgent.
  • Cloud migration from legacy environments delivers four concrete benefits: greater efficiency, lower storage costs even under strict data-retention rules, increased agility, and improved security through enterprise-grade infrastructure.
  • The real question isn't whether to move to the cloud, but when — competitors are already moving, and delay only widens the gap.

Still, some Financial Services companies struggle with the challenge presented by the maze of legacy services built up over decades of mergers and acquisitions. It’s all too common for financial services organizations to still be using IBM mainframes from the 1960s alongside newer technologies. This can make the prospect of cloud transformation seem daunting, to say the least.

However, the question is not if your organization will transition to the cloud, but when. Cloud transformation benefits greatly outweigh the risks — and your competitors are already moving. The longer you wait, the further behind you fall.

Benefits of Cloud Migrations from Legacy Solutions

There are specific benefits to financial services organizations migrating legacy environments to the cloud:

  • Efficiency: A cloud migration offers opportunity for increased efficiency at decreased operational costs. For financial services organizations looking to revolutionize their IT procurement model, a cloud migration from legacy environments is a quick and easy win, opening the door to more modern tools and services.
  • Decreased Storage Costs: The regulatory requirements for data retention can create enormous costs for financial services. Moving to AWS cloud storage solutions can significantly reduce costs, while still meeting stringent data security requirements. A well architected cloud storage solution will meet your needs for virtually unlimited scalability while improving cost transparency and predictability.
  • Increased Agility: To improve their competitive edge, Financial Services organizations are seeking ways to become more agile. A well-planned cloud transformation will result in applications and platforms that effortlessly scale up and down to meet both internal and customer-facing needs. What’s more, a successful cloud transformation means access to new and better tools and advanced resources.
  • Improved Security: Cloud solutions offer access to enterprise-level equipment and the security that comes along with that. This is normally only within the budget of very large organizations. Cloud services provide increased redundancy of data, even across wide geographical areas. They also offer built-in malware protection and best-in-class encryption capabilities.

In my next post, we’ll discuss the “culture transformation” that will enable Financial Services to maximize the return on their cloud transformation investment.

Robb Allen is the CEO of Effectual, Inc.

Frequently Asked Questions

How big is the financial services cloud market expected to become?

According to a Markets and Markets report cited in the article, the financial services cloud market was projected to reach $29.47 billion by 2021, growing at 24.4% annually, with most of that growth in North America.

Which financial services company is cited as a cloud leader?

Capital One, which made public commitments to an all-in, all-AWS cloud strategy and had a significant presence at AWS re:Invent.

Why do financial services firms hesitate to move legacy systems to the cloud?

Many still operate a maze of legacy systems built up through decades of mergers and acquisitions — some still run IBM mainframes from the 1960s alongside newer technology — which makes the prospect of transformation feel daunting.

What are the main benefits of migrating financial services legacy environments to the cloud?

Increased efficiency at lower operational cost, decreased data storage costs despite strict retention requirements, increased agility to scale applications up and down, and improved security through enterprise-level infrastructure, redundancy, and encryption.

Is cloud migration optional for financial services companies?

The article frames it as inevitable — the question isn't if an organization will transition to the cloud, but when, since competitors are already moving and delaying only increases the competitive gap.