Bryan Labelle, Director of Trading Capabilities at London Stock Exchange Group (LSEG) – Data & Analytics Division, discusses the reasons for cloud adoption.
How do you think adoption of the cloud will develop in the future?
The benefits are far and wide. The ability to eliminate the need to think about hardware procurement or how a platform can scale are top of the list. Smaller, more specialised tech-ops teams will also make it easier for companies to focus on their core business. As this industry further commits to cloud infrastructure, we will certainly see greater interoperability and synergies with our customer connections. There will always be the need for certain businesses to use physical servers but based on the advantages we have seen in our business I foresee cloud technology as the predominant infrastructure of the future.
What are some of the challenges?
Technically, cloud technology has been around for quite a while, but it has only seen widespread adoption in the past decade or so. The financial sector is always much slower to adopt new technologies because the data is highly sensitive, and institutions want to ensure the tech is fully baked before taking it for a ride. Moving platforms and applications to the cloud is a substantial pivot which requires specialised expertise. Competition for the talent though is intense, which is why it is important to plan well in advance and be painfully diligent in mapping out all possible scenarios.
How do you build resilience and security in the cloud?
If properly designed and thought out, cloud deployments can alleviate and automate the burden of platform resiliency. Outages are the Achilles heel of a trading business, but using cloud technology and its sophisticated data replication processes reduces the disaster recovery time from hours to minutes.
Security and protecting the applications and data is paramount. Cloud providers are at the forefront and are addressing security at every level of running a platform including operations, application, storage, and networking. This gives them an edge compared to firms running applications in a data-centre.
How will going to the cloud improve the status quo?
At a general level the cloud allows our team to focus on client-oriented core competencies within trading. It will, for example, improve the processes of onboarding and support. This is because running a FIX network of this global scale involves several tasks that are not trading related. This can range from managing the operating system to application code to the ‘bare metal’ that it sits on. Decoupling the hardware supply chain issues, removing obsolescence, and a hardware refresh will all create operational efficiencies.
What is the project you are currently working on?
The firm is heavily investing in the cloud across several businesses. Our FIX capabilities are part of this year’s push to the cloud. The industry trend continues to move to the cloud so having our FIX capabilities in the cloud will better service our clients from a resiliency and scalability perspective. As one would expect, moving a platform from a data centre to the cloud is a big project, so having a keen understanding of the pros and cons of what the cloud will bring for that specific platform is paramount. In our case, we overwhelmingly found that moving our FIX offering to the cloud will bring future dividends and will far outweigh the initial investment and effort.
What are some of the benefits you are hoping to achieve?
There are three pillars that are key for FIX. The first is resiliency. Uptime is paramount for any trading platform but especially for FIX networks since several dozen platforms and thousands of clients are reliant on that last-mile message delivery. The second is throughput, because the ability to respond to market volatility is a core function of any FIX network. Last, but certainly not least is latency. Although FIX hubs are generally not low-latency platforms, messages still have to be moved from A to B in milliseconds.
Moving to the cloud will bolster two of these core functions. Uptime is much easier to manage once there is a properly designed and deployed tech stack in the cloud. Outages can happen but cloud deployed platforms can respond quickly and the real-time scalability is suited for addressing spikes in volatility on a FIX network. From a cost perspective, you only pay for what you use. This is significantly different to the model of putting software on bare metal which has an established performance ceiling. To enhance this performance can take weeks, if not months to scale up.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Refinitiv, or any of its respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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