Instant transactions are periodic, I don’t know any bank that runs them globally on one machine to compensate for time zones.

Ofc they don't run them on one machine. I know that UK banks have only DCs in UK. Also, the daily pattern is almost identical everyday. You spec to handle the peaks, and you are good. Even if you systems are at 20% half the day everyday, you are still saving tons of money.

Batches happen at a fixed time, are idle most of the day.

Between banks, from customer to bank they are not. Also now most circuits are going toward instant payments, so the payments are settled more frequently between banks.

My experience are banks (including UK) that are modernizing, and cloud for most apps brings brutal savings if done right, or moderate savings if getting better HA/RTO.

I want to see this happening. I work for one and I see how our company is literally bleeding from cloud costs.

But that should have been a lambda function that would cost 5 bucks a day tops

One of the most expensive product, for high loads at least. Plus you need to sign things with HSMs etc., and you want a secure environment, perhaps. So I would say...it depends.

Obviously I agree with you, you need to design rationally and not just make a dummy translation of the architecture, but you are paying for someone else to do the work + the service, cloud is going to help to delegate some responsibilities, but it can't be cheaper, especially in the long run since you are not capitalizing anything.