NEW YORK -- The financial sector is often last to adopt new technology, so the tentative embrace of public cloud...
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by some of the biggest names in banking could be a barometer for how far the technology has come.
Technology leaders from Citi, Goldman Sachs and other financial institutions took turns on stage at a Google Cloud Platform (GCP) conference last week to espouse the benefits of a resource once thought to be untouchable by big banks. It's certainly not the first public praise by a large financial institution -- Capital One, for example, is a vocal supporter of Amazon Web Services -- but it did shed light on how these companies view the public cloud as an inevitable component of the future of IT.
Representatives from the financial giants cited a handful of reasons why the walls are finally coming down between public cloud and big banks -- chief among them being security.
"We do think fundamentally risk first," both on behalf of customers and how the company manages its own services, said Don Duet, managing director of technology at Goldman Sachs. "The most important thing to think about is how we design and build from the very bottom of the stack all the way up to the endpoint solution."
Companies can increasingly carry that risk posture over to the public cloud because of some of the newer capabilities to manage keys and set constraints on where data is moved, Duet said.
Goldman Sachs has invested in cloud for at least six years, Duet said, and the company fundamentally believes it will be a huge part of what it and other companies do in the future. He didn't go too deep into details about how it uses any of the public clouds, though he did cite the cloud-based Symphony Communication Services, which it spearheaded with other industry giants for market communication and content sharing and runs on GCP.
"The best we can do is to start the investment process, not just at the edge but core business -- how we trade and process markets," Duet said. "It's a journey, and it's not going to finish in six months, but we also know that by really embracing that and really leading that we're going to create greater partnerships and really identify ways to use technology to solve things that seem like insurmountable problems."
Advancements around security cited at the conference include encryption at rest and in transit, the ability to bring your own keys, certification with regulatory standards and the flood of new data centers around the globe.
"There's no doubt everyone in financial services is paranoid about their data, their clients data, their intellectual property, and our regulators are insistent that we protect our data and our customer data, so it's a serious concern," said Joseph Squeri, who was CIO and CTO of Citadel LLC and helped it transition to GCP prior to leaving the company earlier this year to become a Google executive in residence.
Citadel moved to GCP after its financial modeling outgrew its in-house capacity and efficiency, and now has 100,000 cores on the infrastructure. The public cloud is not just for quick access to cheaper VMs, but it can also serve as a place to start generating new algorithm models based on the big data tools that can help advance the business, Squeri said.
"It's like closet space -- the more you have the more you'll use, but it's actually put to good use," Squeri said.
Offloading the menial and finding new possibilities in the cloud
Citi conducted a proof of concept on GCP along with Thomson Reuters using BigQuery, DataFlow, Cloud Pub/Sub and several other Google cloud services to conduct historical and real-time data analysis on external data sets.
Financial institutions have invested heavily in data centers and networking over the past two decades, but there is a growing number of reasons why those assets are no longer differentiators, with exceptions such as low-latency, high-performance computing, said James Tromans, global head of risk and data at Citi FXLM Technology.
James Tromansglobal head of risk and data, Citi FXLM Technology
"There are clearly some monetized workloads that, if we're honest with ourselves, sometimes are not adding much value," Tromans said. "We're looking for ways to streamline and to make them cheaper to run easier, and that's where Google Cloud Platform and other third parties come in."
Eventually the goal is to move this proof of concept into production and possibly put Citi-owned proprietary data sets into the cloud alongside the market data it already consumes. The real advantage will come not just from offloading data center duties, but combining all these data assets and utilizing tools like machine learning.
"It's about how you can find insights into our own case flows that we have across all of our products and looking at that in the context of market data and the market environment, so not just looking at one set of data in isolation but across data sets," he said.
Tromans and other speakers also cited the importance of meeting developers where they are.
"There's no better way to decrease time to market for software engineers than to make sure they're working with the same tools they're already productive with," Tromans said. "I don't think it makes sense to have one set for workloads at the workplace and a separate set of tools for hobbies, and for yourself and for your education."
In addition to those on stage, representatives from some of the largest financial institutions in the world were in the crowd for the show -- and of course, not everyone was totally ready to jump on the bandwagon. Those attendees uniformly declined to comment due to nondisclosure agreements and other factors, but raised questions throughout the day about additional scrutiny from regulators, vendor lock in, transferring licensing agreements, a potential lack of clarity around compliance and porting internal governance structures to an unfamiliar environment.
Google representatives acknowledged hurdles remain around public cloud and big banks, but Duet challenged the notion that regulators will stymy banks' transitions to the cloud. These institutions will hold financial institutions accountable -- but they also see value in the explicit trust model Goldman Sachs has to use in the cloud.
"Ultimately what that's done is create a much better solution for our own needs and create a much safer environment for Goldman Sachs," Duet said. "Now, listening to regulators, it is creating demand for us to run that way everywhere, not just on public cloud."
Trevor Jones is a news writer with TechTarget's Data Center and Virtualization Media Group. Contact him at firstname.lastname@example.org.
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