finance as a service
DESCRIPTION
From Financial Services to Finance as a Service - How Cloud will transform banking Banks are simultaneously conservative and aggressive adopters of emerging technology, which makes them an interesting case study for cloud adoption. This presentation will begin by looking at the types of services produced and consumed in the finance industry, and how these will be transformed by the commoditisation trend that we call cloud computing. Right now the banks are dipping their toes in the public cloud, whilst starting to transform their own infrastructure into private clouds. Clearly there will be barriers to adoption, such as security and compliance. There will also be business imperatives of agility and efficiency that will push these barriers down. The conclusion will present a vision of banking in 2020, reshaped by cloud computing.TRANSCRIPT
From Financial Servicesto Finance as a Service -how clouds will transform bankingAugust 2010Version 1.0
Agenda
Cloud – yet another definition
Financial Services
Cloud Adoption 2010
Bank 2020
Recap
Questions?
2
What’s ‘cloud’ all about?
3http://www.slideshare.net/skillsmatter/simon-wardley http://www.youtube.com/watch?v=5Oyf4vvJyy4
FINANCIAL SERVICES
4
Market Data
5
Exchange
Exchange
ExchangeMarketData
Provider
Bank
Bank
Bank
Exchanges
6
Exchange
Bank
Bank
Bank
Bank
Bank
Hedge Fund
[MTF]
Multi Lateral Trading Facilities(MTFs)
7
Bank
Bank
Bank
Bank
Bank
Hedge Fund
Prime brokerage
8
Hedge Fund
Hedge Fund
Hedge Fund
Exchange Clearing Settlement
Bank
Ordermanagement
Positionkeeping
ClearingAnd
Settlement
Primebrokerage
Algorithmic trading
9
Hedge Fund
Mutual Fund
Hedge Fund
Exchange Exchange Exchange
Bank
AlgorithmicTradingSystem
Bank as a Service Bundle
10
Client
Client
Client
Exchanges Clearing Settlement
Bank
Equities
Derivatives
FixedIncome Reference
Data
Validationand
Enrichment
RiskManagement
FinancialControl
Clearingand
Settlement
CLOUD ADOPTION 2010
11
Public Cloud
Lots of experiments on IaaS (such as EC2) for high compute low data applications like Monte Carlo simulation (which is used a lot for derivatives pricing & risk management)
PaaS yet to gain real traction (but it’s newer than IaaS and SaaS)
SaaS is starting to find its way from low risk niche to mainstream• HR (learning management, payroll)
• Expenses•CRM
•email next?
12
Held back by
Transition risks•Confusion•Governance•Trust•Security•Transparency
Outsourcing risks•Suitability•Competition•Lock-in•Second source•Control
13
Regulation /Compliance
Private Cloud
Banks use compute the same way that Aluminium plants use electricity
• Economics of utility model look different when you consume at sufficient scale
BUT
• You can learn a lot from the companies that are industrialising the utilities and disrupting the marketplace• Book shops don’t care about the
profitability of the IT industry (and neither should banks)
14
Industry Cloud
Trading venues (exchanges/MTFs) are industry utilities
•Many common characteristics with public clouds
BUT
• Avoid many of the risks
15
WHAT HAPPENS WHEN THE CLOUD BECOMES THE PRIME BROKER FOR THE TIER ONES?
16
Bank as a Service Bundle
17
Client
Client
Client
Exchanges Clearing Settlement
Bank
Equities
Derivatives
FixedIncome Reference
Data
Validationand
Enrichment
RiskManagement
FinancialControl
Clearingand
Settlement
Clearing Settlement
Bank 2020
18
Bank
Service cloud
Client
Client
Client
Exchanges
Equities
Derivatives
FixedIncome Reference
Data
Validationand
Enrichment
RiskManagement
FinancialControl
Clearingand
Settlement
RECAP
19
Cloud is compute as a commodity
20
http://www.slideshare.net/skillsmatter/simon-wardley http://www.youtube.com/watch?v=5Oyf4vvJyy4
Banks are compute based services
21
Client
Client
Client
Exchanges Clearing Settlement
Bank
Equities
Derivatives
FixedIncome Reference
Data
Validationand
Enrichment
RiskManagement
FinancialControl
Clearingand
Settlement
Clearing Settlement
That will be hollowed out byCloud Computing
22
Bank
Service cloud
Client
Client
Client
Exchanges
Equities
Derivatives
FixedIncome Reference
Data
Validationand
Enrichment
RiskManagement
FinancialControl
Clearingand
Settlement
QUESTIONS?
23
24