This year’s AWS re: Invent conference demonstrated that the cycle of change extends from new leadership at AWS itself to the ways in which the financial system may evolve in the coming years.
Adam Selipsky has led his first keynote at re:Invent as AWS CEO since taking over in May. This year’s conference took place in person in Las Vegas with remote video streaming. Selipsky said that since the launch of AWS nearly 15 years ago, the cloud has enabled a fundamental transformation in the way businesses operate. “There is no industry that has not been touched upon and there is no business that cannot be fundamentally disrupted.”
Despite the trend, he said, adoption is still in its early days. Selipsky said analysts estimate that 5% to 15% of IT spending has moved to the cloud. That leaves plenty of room for more workloads to move to the cloud in the coming years, he said.
Selipsky painted a rosy picture of cloud capabilities, with 5G and IoT pushing the edge of the cloud into new places, as well as seamless integration of data, analytics, and machine learning. Such innovations appear poised to drive new transformations in the financial sector.
Nasdaq CEO Adina Friedman joined Selipsky on stage to provide some perspective on how the exchange’s operator can continue to benefit from the cloud. She said Nasdaq plans to bring the cloud to financial markets in partnership with AWS, along with its other efforts to expand its presence outside of its markets. “[Nasdaq is] technology company and SaaS provider to the broader capital markets ecosystem,” Friedman said.
The technology from Nasdaq can be found in about 130 markets around the world, it said, with trading, clearing, settlement and monitoring solutions. “We’re bringing powered technology from Singapore to Brazil, and from Japan to Switzerland,” Friedman said. Nasdaq has also put its expertise in the financial markets to develop new markets including cryptocurrency exchanges and sports betting platforms.
The scale of Nasdaq’s systems, which are responsible for handling hundreds of billions of dollars every day, means there are key technical attributes it said are necessary to successfully conduct such activity in the cloud. “It should be highly scalable, highly flexible, high-performance down to nanoseconds, and fair to all participants,” she said. NASDAQ’s request for commercial processing occurs in 20 microseconds or less, Friedman said. “To put that into perspective, this is 10,000 times faster than the blink of an eye.”
Nasdaq provides AWS-based SaaS solutions to the broader capital markets ecosystem. It also provides financial crime-fighting technology to 2,000 banks and credit unions, it added. “This data-centric cloud architecture allows us to use highly advanced algorithms to catch criminals across the entire financial system.”
Friedman said Nasdaq is working on bringing its market services to the cloud and in 2022 it will bring the first US options market to the AWS cloud. “We will pursue more of our markets while working closely with our customers, regulators and other constituents,” she said.
Friedman said recent collaborative efforts between Nasdaq and AWS have included the development of ultra-low-latency computing systems designed for the capital markets. “By leveraging the hybrid cloud capabilities of AWS Outposts, we can now bring the feature directly into our primary data center in Carteret, New Jersey, creating the first-ever local capital markets district.”
In other words, Nasdaq will use AWS computing and other resources from that data center. This would be part of creating a cloud hub within Nasdaq’s footprint and allowing its US markets to move to the cloud. The plan ultimately aims to expand this strategy to other geographies, including Nasdaq’s 130 market technology clients. “We are already partnering with AWS to roll out cloud-based trading and clearing solutions to multiple markets and clearinghouses around the world,” said Friedman.
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