Banks running on mainframes don't shard. They just throw more hardware at the problem. The modern mainframes capacity for raw IO is insane, and much higher than what you can achieve with any PC setup. More hardware, more bandwidth, client facing applications in the cloud, database on the mainframe.

The major difference lies in infrastructure, particularly networking infrastructure. With cloud providers like Azure, AWS, etc, you can provision your vnet layout, and scale "indefinitely" on the same infrastructure. You don't need to provision new hosts, setup new secrets, or anything like that.

If a data center goes down, you can relatively easy switch to another one, though most financial institutions I know of uses hot/cold setups as hot/hot is essentially twice the money, and they rarely go down for long.

Of course it's all just regular servers underneath, so anything possible with AWS and Azure is also possible with other cloud providers, but the tooling simply isn't there (yet?).

Another issue is ISO auditor compliance. Being a regulated industry, finance (in EU at least) needs certain compliance to be fulfilled, not only regarding the services you consume, but also stuff like the physical locations, or being able to physically inspect the data center if auditors require it.

Microsoft and Amazon has this nailed. I've yet to experience a EU data center not run by FAANG meet the requirements, not that they can't. My best hope so far is probably "Lidl cloud" (forgot the name).

Right, the networking is the biggest hurdle in splitting up your infra.

The compliance issues are another big one though, for organizations that are still scaling up and don’t have that know how using cloud is a huge advantage as well.