Next year will be the year when companies in the financial markets begin to spend time and money reinventing their trading operations for an inevitable cloud-based future. Exchanges such as CME – recently partnered with Google Cloud – and Nasdaq – recently partnered with AWS – have already announced plans to move their match engines. Companies must decide whether to pursue a public, private, or hybrid model.
While cloud technology brings attractive features, the limitations of existing public clouds must be addressed before large-scale adoption occurs. For example, most exchanges use multicast distribution of market data. While public clouds are taking steps to support multicasting, can they handle the volume of data in some of these exchanges, as well as security and regulatory concerns? Companies will also need to navigate the exchanges’ business models to ensure they choose a cloud deployment where costs still make sense versus expected savings.
Most companies are likely to pursue a hybrid model: using public clouds where it makes sense, that is, accessing an exchange, and using a private or hybrid cloud in other areas. Ultimately, there won’t be just one cloud, but a number of different ones that will tie together to create a cohesive, global trading platform.
– Alastair Watson, Managing Director, EMEA, TNS Financial Markets
You have to be optimistic about running a stock market business, so I’m going to put aside fears about COVID-19 and its ugly variants and also worries about potential interest rate hikes, instead of focusing on what might be right. happen next year. I predict that in 2022, the uncertainty over Brexit and the rule divergence will finally begin to dissipate and a clearer picture of the regulatory landscape will emerge. I hope the UK emerges from this realignment with a strong set of rules that are strongly business-friendly and less prescriptive than the legislative changes currently being decided in Brussels.
The other area where I see great progress being made is in the area of the cloud. While blockchain and crypto have sucked much of the oxygen into the innovation arena over the past few years, it’s in the more prosaic cloud that we are seeing fundamental changes. We are witnessing the evolution of a whole new generation of exchanges that are above all cloud-based. Right now, most of these are small-scale operations, but as our project with Amazon Web Services and Singapore Exchange has shown, high-level exchanges can be performed successfully in the cloud as well. I think we’ll see this trend accelerate in 2022 and beyond.
– Alasdair Haynes, CEO of Aquis Exchange PLC
Whether private, public or hybrid, the cloud is becoming more than just a data destination. It becomes a platform for business transformation, with a notable shift towards end-to-end platforms. Cloud-based platforms allow customers to be much more agile using open APIs, translucent data, and highly efficient solutions. Organizations that become cloud native will be in the best position to take advantage of the benefits of global mega clouds. They will be able to truly evolve on multi-tenant solutions and benefit from reduced costs. It also has benefits for social and environmental governance (ESG). The more efficient an organization can become at all levels, the better your position is to improve your sustainability score and when it comes to ESG, financial services have a very important role to play. With greater transparency in the ESG behavior of companies – and their respective stocks, bonds, derivatives – this data can be shared with agencies to provide a clearer rating of the company. Using data providers, these scores can be synthesized, captured against the security master, and presented on easy-to-understand dashboards. For example, an asset manager will be able to consult their end-to-end book and see the overall ESG score of that portfolio. If they had to adjust that score up or down, they could.
– Tony Warren, Executive Vice President and Head of Strategy and Solutions Management, FIS