Obstacles to Modernizing Infrastructure

Anthony Concolino, former director of operations and technology at Citi, pointed to corporate culture. It's not that the culture and the people that make up that culture are necessarily resistant to change. It's just that, especially at a large institution like a bank, many individuals need to be brought on board before a major upgrade can begin.

Nathan Boylan, head of IT at Lord Abbett, said that the vendors supplying the new systems, including hosting providers, need to truly understand the financial services industry. That includes the rigorous security and regulatory concerns. Especially in the case of cloud, this is still sometimes not the case. The industry as a whole, however, has gotten much better. "I look two to three years back and there were a lot of firms that had great ideas but had no understanding of our industry, in part due to there being much greater opportunity with Silicon Valley startups than there was with financial services. Now they're looking at our industry as offering great opportunity."

Continuing with the vendor theme, RBC Capital Markets director Rosalind Mann identified a risk with insufficient service-level agreements (SLAs). SLAs must be well-defined, so that when a cloud service's user base grows, there won't be a massive slowdown.

Meenagi Venkat, who is in charge of cloud managed services for IBM, said his most sophisticated customers stay on top of security policies and procedures.

"Oftentimes the existing clients are looking for in-house datacenter implementations with perhaps lower levels of automation. When you go to a vendor that has higher automation but it's not in your physical control, we have to look at things like where is the balance between secondary controls and primary controls, how much orchestration is there, can they give you audit trails of all the events that happened in the environment that you touch."