Financial services executives are looking for ways to meet shareholder demands to improve the bottom-line as they face fluctuating customer loyalty, wafer-thin margins, and low growth in traditional businesses. Add to that the high regulatory scrutiny and ever-changing risk management and regulatory requirements that are having a huge impact on resources and investments available for meeting the challenges.
Our Clients are looking for solutions that can help them grow their business, streamline operations, and manage risk while reducing costs and business complexity—all of which needs to be delivered keeping their clients’ data and information private and most secure. Cloud computing offers advantages that can actually help overcome these challenges.
However, public cloud adoption for customer sensitive information still remains a WIP in our industry, which is why clients are more interested in the ability of a solution provider to offer a seamless hybrid strategy – to have the flexibility to leverage the public cloud for non PII data, while retaining the core customer sensitive data and associated controls within their own firewalls.
One of the business areas where cloud holds tremendous promise is in the risk management arena, where the challenges for our clients continue to accentuate with increased electronic trading and complexities in product structuring and evolving execution avenues.
A Cloud based model architected right can offer the industry a compelling value proposition comprising of a seamless, flexible ecosystem of line of business applications that manage the entire risk management lifecycle right from data sourcing, through data management, compute, analytics, consumption, distribution and monetisation.
Many of the above areas are ripe for disruption with legacy systems storing multiple versions of homogenous market and reference data sources in silos on one end to disparate risk modeling approaches and valuation models churning up multiple versions of the truth.
In addition, compliance requirements for computing CVA/PFE etc require a huge amount of compute grid infrastructure capacity that is only expected to increase 20-30% on an annualised basis. Would a financial institution, in today’s day and age serve up a Rolls Royce infrastructure via a dedicated on-premise infrastructure grid to run capacity that would, for the most part remain largely underutilised or look to leverage cloud infrastructure, that can be sourced and scaled, literally at the touch of a button, switched off as demand ebbs and pay as you go, in the process move to an opex model with a more compelling ROI?
Finally all of the data and modeling results being emailed to around for middle and back-office as well as regulatory requirements only creates a huge complexity in managing versions and delays in “time to value” – getting business users the data they need via the devices they prefer, and the media they use. All of this can now be served up via the cloud to devices and business users that are able to use the data – big or otherwise to run pervasive business insight across their business or the enterprise in a timely, consistent and dynamic manner and offer their clients value added insight with the support of modern, game changing technologies. Innovative cloud solutions allow consumers of data and analytics to search for, discover, and access:
- multiple sources and providers of data through one consistent set of interfaces
- multiple asset classes and types of data within a single, simple data model
- data wherever it is needed: in Excel; within programming environments; across geographies
Data from on premise databases and systems can be securely merged with cloud-based data and analytics in order to create powerful, transparent and always up-to-date reports, analysis, and more. Business teams can then leverage these tools to run and share computational outputs, collaborate, and deliver growth for the business.
Once you have this architecture there are numerous business models that can emerge, to help create new products and monetise such a solution via a marketplace.
By Rupesh Khendry, Head of WW Capital Markets Industry Solutions, Microsoft