State Street has engaged two cloud providers for a multi-year technology transformation and MSCI will build a cloud-native investment data acquisition and development platform.
On 26 January State Street announced that it has engaged both Amazon Web Services (AWS) and Microsoft as providers of cloud and infrastructure solutions to consolidate its current network of segregated data center facilities to a more optimized data center footprint with fit-for-purpose designed and managed facilities. Two core North American data centers will migrate to AWS, while State Street will expand the use of Microsoft Azure cloud as a platform for business applications.
Brian Franz, chief information officer of State Street, said in a statement: “By standardizing and simplifying our technology operating model, we will be able to more quickly deploy client environments and launch new products and services, while continuing to enhance the resiliency of our technology environment and our business operations.”
MSCI
MSCI announced a strategic alliance on January 25 with Google Cloud to build a cloud-native investment data acquisition and development platform. Using Google Cloud’s artificial intelligence and natural language processing technologies, and and advanced analytics, will allow MSCI to acquire, ingest, and process structured and unstructured data at scale and more quickly than ever before. By having consistent data, MSCI can more easily innovate its suite of solutions and unlock insights at speed.
Additionally, Google Cloud will provide MSCI with geospatial analytics tools, such as Earth Engine and BigQuery Geospatial, to help quantify physical and transition climate risk metrics across securities, geographies, and markets.
Henry Fernandez, chairman and chief executive of MSCI, said in a statement: “This alliance will bolster MSCI’s world-class solutions, helping our clients quickly turn data into relevant and actionable insights across asset classes and issues, such as climate risk.”
Thomas Kurian, chief of Google Cloud, said in a statement that the technology enables customers to analyze structured and unstructured data in one system, and unify data lakes, data warehouses, and machine learning into a single platform.
Digital transformation
A majority of financial services firms view digital transformation as essential to their business and are already looking to the next wave of technology to help get ahead, according to new research from technology provider Broadridge Financial Solutions.
Broadridge’s 2023 Digital Transformation and Next-Gen Tech survey found that 80% of respondents think financial services will modernize its tech stack before we land a human on Mars, currently estimated to happen within a decade. The survey was conducted by ThoughtLab Group and covered C-suite executives and their direct reports from 500 financial institutions globally on both the buy and sell side in November 2022.
“Some will do this by “lifting and shifting” legacy systems in favor of more cost-effective, cloud-based infrastructure that puts microservices and APIs at the core,” said the report.
Leaders in digital transformation said that if they had a magic wand to accelerate change they would dramatically expand the use of AI across the enterprise, and centralize data across the firm. The top choice for all others was replacing legacy systems with modern cloud platforms, indicating the gap in progress between the firms leading the way and those lagging behind.
Investment in next-gen technology is seen as essential in preparing for the future. The majority, 57%, of firms agreed that falling behind in digital transformation will hurt their ability to attract and retain talent, further impeding their ability to unlock new and innovative tools and platforms.
For example, Nasdaq successfully moved the core trading system of Nasdaq MRX, one of its six U.S. options exchanges, to cloud platform Amazon Web Services (AWS), which improved latency performance by 10%.
Adena Friedman, chair and chief executive of Nasdaq, said on the results call: “As the first exchange to put a major market in the cloud, this marks a significant milestone in our journey to build a next generation technology infrastructure for the world’s capital markets.”
These capabilities will also become available to Nasdaq’s technology clients to enable them to deploy cloud-based market infrastructures in their home markets.
In January 2023, for example, Nasdaq signed an agreement with Bolsa Electrónica de Chile. BEC is upgrading its current on-premise Nasdaq trading technology to Nasdaq’s software as a service (SaaS-based) Marketplace Services platform, with the aim of migrating operations to the cloud by the end of 2024.
Last December London Stock Exchange Group and Microsoft launched a 10-year strategic partnership for next-generation data & analytics and cloud infrastructure solutions.
LSEG will use Azure Purview and Azure Synapse to accelerate its cloud migration plans and consolidate its data architecture. The partnership consists of four elements – the migration of the LSEG data platform to the Microsoft Azure cloud; integrating LSEG Workspace, LSEG’s data and analytics workflow solution so it works seamlessly with Microsoft Teams; the development of new cloud-used analytics and exploring the development of digital markets infrastructure based on cloud technology.
In 2022 CME Group also announced a 10-year strategic partnership with Google Cloud, which included Google making a $1bn equity investment in the derivatives exchange.
