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THE OFFICIAL NEWSPAPER OF TRADETECH 2018
Trading Book (FRTB) and Solvency II,” says
John Kain, business development manager,
capital markets, AWS Financial Services.
“We’re helping traditional, industry-leading
financial services companies transform their
organisations through cloud adoption, and
also enabling them to build net-new, innova-
tive solutions for their customers.”
It is evident is the disruptive nature AWS
and other cloud providers are having on the
financial services industry. Particularly with-
in the infrastructure sector, entire businesses
are now being built on AWS and the cloud,
according to Kain. Deploying applications
on top of that cloud infrastructure is now the
next phase in its evolution.
Global organisations such as Capital One
have been steadily migrating their entire
business on to the cloud, largely due to the
cost and speed benefits it produces. “Most
organisations like having a lower variable ex-
pense in the cloud than they can do on their
own. Moreover, they really like the elasticity
as their demand fluctuates,” explains Kain.
AWS is both disrupting the financial ser-
vices industry directly and indirectly, as it
is driving a new perspective from buy-side
firms as to how they approach technology
and who their service providers should be.
“With AWS, institutional investors can
devote more time to innovating and addressing
customer challenges and less time worrying
about infrastructure and technology deploy-
ment. From testing and re-testing new applica-
tions quickly and consistently, to having global
technological resources at their disposal, AWS
provides them with more control over their
technology decisions,” adds Kain.
Indus Valley’s Singh agrees, in which he has
seen eight out of 10 buy-side clients putting
AWS or a similar kind of cloud infrastructure
into their systems.
“It [AWS] is significantly disrupting the fi-
nancial services world, whether it is visible or
not. A situation where you can use artificial
intelligence (AI) enabled AWS services that
learn unsupervised instead of a traditional
securities services provider for data manage-
ment or reporting very well could be real in
next few years,” says Singh.
Never the same again
The recent surge by AWS in financial services
does pose the question whether it will enter
the securities services industry. Market
experts doubt this, considering the amount
of regulation AWS will have to comply with
to be a bank. Nevertheless, AWS has sparked
a new way of thinking among buy- and sell-
side fi rms over how financial and securities
services are conducted.
“AWS itself is, in my view, unlikely to offer
banking and securities services directly to
institutional investors, but these investors
will indirectly be absolutely reliant on AWS’
infrastructure and capabilities because they
are becoming more and more essential to
the financial services providers and market
infrastructures across the industry,” says
Thomas Lemon, managing director, technolo-
gy consulting, Protiviti.
Lemon adds that AWS and other cloud pro-
viders that harness open API’s (application
programming interface) and other disruptive
technologies are likely to have an indirect
effect on business and operating models.
“These indirect implications, which could
spawn totally new business models, may be
even larger than the direct impact of firms
moving infrastructure to the cloud. This is
likely to make existing financial services
providers rethink their product and services
strategies. They will either need to operate in
the cloud, or with the cloud, or both,” he says.
For the incumbent service providers that
have been wary of the cloud, attitudes are
shifting as more and more institutions look to
take advantage of the benefits the technology
The Depository Trust and Clearing Corpo-
ration (DTCC) has been one of the first global
financial institutions to move its workload to
the cloud. Historically, DTCC’s core plat-
forms and systems had been hosted in private
data centres, however it is now looking to
modernise these platforms and turning to
externally-hosted, public cloud vendors.
In a recent white paper published by DTCC,
it stated it would be expanding its leverage of
cloud technology over the next three to five
years, with the goal to reduce risk and improve
security of its systems.