A unique approach
The fintech landscape is constantly changing and as a result the development of cloud systems has evolved. Notably, it was the big internet players and Software as a Service (SaaS) providers, such as Facebook, Google and Amazon that were quickest off the mark to adopt cloud and profit from the innovative opportunities that these new ways of working provide.
These providers found their way first, and financial services organisations can benefit from their experiences – either by working with them directly or avoiding their mistakes.
For example, the financial industry has traditionally been hesitant towards the cloud due to security concerns, especially because of the high sensitivity of their data, whether it is trading information or clients’ personal information. However, by learning from the trailblazers, processes and tooling has evolved to evaluate potential negatives of the cloud to form an approach to fit businesses specific requirements.
This new development approach uses a combination of tooling and processes, including tools like Platform-as-a-Service (PaaS), Continuous Integration (CI) and continuous testing architectures, based on Service-Oriented Architecture (SOA) and deployment based on containerisation. The production environment can be a fixed IT estate, or a dynamic cloud environment. This approach has largely allowed firms to tackle their concerns as they take their first steps into the cloud.
Agility is key
A key benefit of the cloud is increased agility meaning businesses can be faster to market with new products or initiatives. Additionally, by adding automation to their cloud processes, these companies have been able to improve capacity flexibility to manage peak demands, leading to greater uptime in availability of services. The upshot is that valuable human time can be allocated to more value-driven tasks.
Time is money – manage it in real time
Firms in the capital markets space process vast amounts of information, for these businesses time genuinely is money. Delays in market data, trading execution, pre- and post-trade risk calculations and pricing, clearing, settlement and regulatory reporting are all costly. In the world of fixed IT estates, time criticality means that the production estate needs to be large enough to cater for the busiest periods, even if they are infrequent (such as peak days in the month like non-farm payroll day and ECB announcement days).
Combined with the need to hold a suitable Disaster Recovery (DR) capability, this translates into a large amount of heavily under-utilised computing power for most of the time. Typically, we are talking about servers running at less than 20 per cent utilisation over 95 per cent of the time. Datacentres are notoriously expensive, resulting in a huge wasted cost.
Ease and agility are two major hallmarks of the cloud. Like many other industries, financial services is changing rapidly. Cloud makes it easier to develop and deploy web-based solutions and mobile applications for the digital world. It also allows a business to centralise support services, maintain infrastructure, and generally respond to changing business needs without procuring new hardware.
Smelling the bacon
New DevOps techniques, underlined by issues of under-utilisation, mean that trading companies are now starting to use more flexible environments which can grow in capacity when demand is high, and shrink when it is low. Data centres have previously been described as complex, expensive and inefficient. However, by adopting cloud as part of their IT estate, businesses can benefit from the ROI such a flexible structure can provide, while maintaining confidence in being able to deliver constant uptime of services. What’s more, cloud doesn’t have to be a black and white, either-or choice: different systems can be migrated to the cloud gradually, reducing risk and diminishing fear of the plunge.
It seems that the question is not if, but when, for the integration of cloud within the financial services industry.