DTCC Connection

Mar 20, 2017 • DTCC Connection

A Leap Forward Into the Cloud Computing Era

By Frances A. McMorris

A Leap Forward Into the Cloud Computing Era
(Left to right): Robert Palatnick, Saman Michael Far and Scott Mullins

As cloud computing becomes more widespread and evolves to the point where public cloud vendors are surpassing the capabilities of private data centers, businesses in every industry are confronting the question of whether to adapt to this new disruptive technology or maintain their own on-premises data centers and be left behind.

A pair of industry experts discussed the rapid transformation and adoption of the cloud and their approaches to implementing this new technology during The Depository Trust & Clearing Corporation (DTCC) Fintech Symposium 2017 which took place on March 1 in New York City.

This session, “A Leap Forward into the Cloud Computing Era,” was moderated by Robert Palatnick, DTCC Managing Director and Chief Technology Architect. The panel featured Scott Mullins, Head of Worldwide Financial Services Business Development for Amazon Web Services (AWS), and Saman Michael Far, Senior Vice President of Technology for FINRA.

The Pace of Change

In using the cloud, customers must plan for failure and design for resiliency, Mullins noted. Giving clients the capability to “pivot and react in relation to events is something we’re seeing as a main driver for adoption of cloud technology,” Mullins said.

Mullins pointed to FINRA’s adoption of the cloud to improve market surveillance and member regulation. Agility and the ability to be resilient have surpassed customers’ focus on cost because the cost, Mullins noted, has become commoditized in many ways.

Far noted several factors underpinning FINRA’s commitment to the cloud. These include a steady increase in market volumes accompanied by greater complexity and rising cost; business users looking to have more direct access to data; and the ability to automate functions that have traditionally be done manually, Far said.

Palatnick noted that every disruptive business model – from Uber to Netflix to Airbnb to Apple’s iTunes and most current distributed ledger technology initiatives – uses infrastructure provided by public cloud vendors.

Best Practices for Success in the Cloud

FINRA developed its use of the cloud over a two and one-half year period – ending in June 2016, Far said. “It was really a Manhattan Project for us in a sense that it had a lot of focus and attention.” The team members tackled their most difficult business problems first and made sure the cloud could meet their needs. Within four to five months, queries that took hours and minutes were reduced to seconds, Far added.

Acknowledging FINRA’s success, Mullins said AWS ascribes to four best practices. First, is executive sponsorship. “You’ve got to have a leader who has a vision for changing organization.”

Second is having dedicated resources. “If you’re still in the stage where you’re treating this as an experiment and you’re allocating an eighth of somebody’s time every other Tuesday, you’re not likely to be successful,” Mullins said.

The third practice is choosing something valuable that has meaning to the organization and that business owners will get behind.

Finally, Mullins explained the organization must have “a vision for what success looks like, beginning with the end in mind.”

The Cloud as a Business Value

Mullins said in capital markets, banking and insurance, companies are taking advantage of the cloud in ways that are transformative. Among them is market surveillance, data warehousing, and vending market data from the cloud.

However, Far noted that any business thinking of shifting processes to the cloud must realize the role that cultural norms play. Despite the advantages cloud technology brings today’s workforce may not embrace rapid change, he added. Retraining is the key. “It’s a people issue first, and each organization is different on how to cut through that to make some change happen like that.”

Mullins said it all comes down to finding the right resources; whether that means a company repurposing its own employees and training them to work in a cloud environment or partnering with an outside firm.

The Security Issue

Mullins commented that concerns about the security of cloud technology are diminishing as the industry becomes more educated on its benefits. “Today, we spend about as much time talking about regulatory compliance as we do security,” he said.

Far agreed that security is no longer a primary concern. “Security in the public cloud, if done properly, is better than an in-house data center,” he said. “The level of investment in research and development that an organization like Amazon Web Services is putting into this is more than any single company – no matter how big – can do. It’s not core to any of our businesses in the same way it is the core of the AWS offering.”

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