Brian Traquair, EVP Financial Systems, SunGard
When I started in the financial services industry, the origins of cloud computing was referred to as timesharing (albeit with dedicated networks). The technology capability then evolved into application service provision (ASP) with internet access but defined vertical or horizontal scope. Now we have true cloud computing with universality of access, data held securely with a trusted provider and light footprint applications, or even server/application creation. The difference between the various incarnations of shared computing is the growing perception of what you can do, and the ease with which you can do it. If you wanted 100 people to share a calendar 10 years ago, you could do it but it would have taken a lot of time; now it is free and easy. Cloud computing is about having an on-demand approach to solving business problems and trusting providers to securely store and manage data.
"Cloud computing allows firms to experiment more; they can try different applications and processes without large startup and operations costs"
The capital markets industry is realizing the benefits of cloud computing as sell-side firms move to easier access to global applications at a lower and much more variable cost. The concerns about security are being addressed by major providers like SunGard, and that creates more confidence that the traditional captive computing served up by customer data centers and proprietary footprints can give way to more general solutions. Cloud computing allows firms to experiment more; they can try different applications and processes without large startup and operations costs. Cloud computing also provides portability, enabling diverse access to applications and data anytime from groups of users anywhere in the world.
SunGard provides an on demand approach to access applications and data to help customers move away from less efficient on premise operations. SunGard has years of experience and understands the security and operational functionality that the capital markets industry needs, so we are able to put together the right cloud computing solutions for our customers. We view it as an extension of the work we have been doing for a long time, taking on more of the customer’s operational activities and providing them with applications and data securely, when and where they need it. Where we can really help customers is around the intellectual property of our products–providing a secure cloud environment tailored to a suite of solutions for an industry for a given set of users.
Consumer-driven applications can have millions of users and these applications tend to gather point of sale information which naturally builds data by individual customer. There is a huge amount of interest in segmentation among customers in the consumer world which lends itself to the creation and use of big data.
In capital markets you have fewer customers but with much more data in each vertical; for example in trading or clearing, the data you collect may have a few thousand customers but there is a ton of data for each one of them, both static and transactional. Although capital markets firms in the past did not make it a high priority to analyze this data, the increasing regulatory environment and drive to automate and bring efficiencies is helping to push big data utilization and resiliency. The need to reduce total cost of ownership is also helping to drive big data adoption and the technology needed to support it.
One example of where we are seeing big data consumption in capital markets is in the risk and compliance space. Firms need access to an integrated, holistic and real-time view of their risk (clients, positions, transactions, market data), not only to satisfy regulatory demands but to garner competitive advantage. The amassing of this data in a form where end users can dive without scuba gear also enables analysis which turns the information into insights. Firms are no longer just using big data to investigate issues, but also to signal an issue before it becomes a problem. The data can allow a firm to adopt coping strategies in real-time and ensure decision-making that can drive value. SunGard is using in memory technology to provide customers with big data strategies and dashboards.
The biggest change I have seen working with CIOs the past couple of years is a move from a defensive to an offensive posture. The prevailing requirement continues to be reducing total cost of ownership as firms cope with capital restrictions and the market requirement of decreased costs in scale operations. At the same time, firms are deciding to build and compete in new markets and geographies. CIOs are now saying, let’s maintain the legacy systems but let’s also build new platforms, evolving into a more competitive stance in the areas where they can gain a proprietary advantage. CIOs are faced with a technology dilemma , as all firms have legacy applications but a new generation of employees and customers has arrived whose needs are driven by advanced technologies. It can be a challenge to balance these two worlds. CIOs are now looking to outsource more of their systems to reduce costs and increase bandwidth, so the company can focus on its core competencies. SunGard receives a lot of requests to help firms consolidate, integrate and outsource their technology platforms. A customer will define an end-to-end area where they have 10, 15 or 20 applications and they want to replace them with 1 system to help lower costs, increase efficiency and improve capabilities. This results in larger projects with a material impact on operational efficiency as whole functions are automated and streamlined without regard to historical system restrictions.