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It is now hard to imagine life without the convenience of online banking and trading with the “Whatever-Wherever-Whenever” phenomenon having weaved magic into the operations of financial institutions and wowed the investor community. Yet, security concerns had for long been a deterrent to net-based transactions, even threatening to hinder the growth of e-commerce that now holds great hope for business -- both retail and wholesale.

Not any longer as near fool-proof encryption, firewall technologies and multi-layered security mechanisms have helped erase apprehensions and led to sustained growth in electronic trading and business. What is more, financial markets, generally prone to cyclical recessionary storms, are now increasingly open even to the idea of embracing cloud-based services.

While security and regulatory concerns may still keep some sceptics away from the cloud, particularly where it relates to transactional data, there is no question that any initial fear is now dramatically making way for euphoria. 

Even Nasdaq uses the cloud for data storage. Reports say Nasdaq adds up to 80GB of data everyday to the cloud. Many of the world’s top exchanges, securities’ firms and investment managers have already thrown their weight behind managed infrastructure and begun evaluating various cloud options. 

Market data demonstrate that cloud computing has well gone past the realm of hype. A Gartner report projects worldwide cloud services revenue to reach US$148.8 billion by 2014 from US$58.6 billion in 2009. The report also points out that the financial services sector is among the largest early adopters of cloud services. Significantly, they are beginning to go beyond emails and archiving as these alone cannot make a persuasive business case for cloud computing.

Another research firm, Ovum, also reports that interest from previously cautious end-users can be expected to increase rapidly over the next two to three years. It goes on to add that major global telecommunications service providers are well placed to tap the growing adoption of cloud by enterprises.

According to IDC, cloud computing will grow by 27% a year over the next few years. With businesses of every size already using public blogging and social networking portals such as Twitter and Facebook in a big way, the cloud is hardly an inhibiting factor now.

The US market share for cloud services is put at 60%, but Gartner expects this to come down to 50% by 2014 by when the UK is forecast to account for 29% of the market. The gulf is because privacy laws in the UK (and Europe) are more stringent than in the US and remain a barrier to widespread cloud adoption. 

Within Asia Pacific, Japan has a 10% share of the global cloud revenues now. But upbeat projections are coming from Springboard Research, which has determined that 45% of organizations in Asia Pacific, excluding Japan (APEJ) are either currently using or planning cloud initiatives, up from 22% in 2009.