Anthony believes that more firms are moving mission critical functions to the cloud. As they do, though, it's important to note that there's a major difference between a public and private cloud.
At this year's North American Trading Architecture Summit (NATAS), panelists from the sell side ─ Citi, UBS, Deutsche Bank and State Street, to be specific ─ said that they would not be willing to move mission-critical functions to the cloud.
Now maybe I don't fully understand what exactly a "mission-critical" function is, but I am constantly writing about firms sending their email to the cloud; risk management systems, portfolio management systems, and even order management systems and execution management systems that are being run through the cloud too; and any number of data management capabilities that are being sent to the cloud. To that last point, fair enough, you will never see client information run through a public cloud. But internal, private clouds are clouds, nonetheless.
When the audience in attendance was asked to raise their hands if they have moved any of their business critical functions to the cloud, no one moved. Were they afraid to say? Did they not know? Was there really not a single company in the room that had moved mission critical platforms and services into the cloud? Was everyone simply in the room waiting for lunch to be served?
Then a CIO from a mid-sized asset manager came forward and made the case for mission critical functions to run through a non-public cloud that has a dedicated network to back up the system.
"We have moved some very important functions out [to the cloud] through a SaaS model," the CIO said. "With a dedicated network to those functions, I don't see why we can't move mission critical functions out there. For us we say cloud implies access over the Internet; I would not put mission critical functions with reliance on access to the Internet. But with the traditional network going out of two sides of your building, I think we would consider mission critical functions in the cloud."
I think that if we're going to have an honest discussion about cloud, then we need to first define what we're talking about when we say cloud (and most importantly, private versus public, as the latter is not viable for mission-critical) and then we need to define what exact systems and platforms are mission-critical, and which systems can handle an outage without wreaking havoc on the institution, making them better targets for a public cloud).
The best people to lead these conversations are the technologists. Business leaders and traders aren't going to have the understanding as to the differences of a private cloud versus Amazon Web Services (AWS) or Google's cloud. They don't know how an outage occurs and what it means to their trading systems.
This isn't just a conversation about a data breach that leaks client information ─ that's the "worst nightmare scenario". I do believe that mission-critical functions are moving to the cloud in ever-increasing droves; I just think that semantics are getting in the way of this conversation.
Anthony and James delve into how the systematic internalizer regime is shaping up, and then examine the regtech sector.Subscribe to Weekly Wrap emails