Firms Look to the Cloud for Big Data Solutions
Cloud computing continues to be touted as holding many of the answers to taming the seemingly exponential rise of ‘big data’.
But issues of compliance, reliability and security persist as some financial services firms remain reluctant to move into cloud computing, which is the practice of using a network of remote servers hosted on the internet to store, manage and process data, rather than on a local server.
With the amounts of data that firms are now being forced to use and hold escalating at a rapid rate, cloud computing—which is an increasingly mature technology that has now been around for a few years—is becoming an attractive option for many firms in dealing with these big data needs.
However, financial services watchdogs, especially in Europe, continue to have concerns as to where the data in a cloud actually resides. Regulators have serious issues if a firm cannot identify where its data is being stored and how it got there. An example of this would be if the data traveled via another country en route to the data center.
While a recent study by Exponential-e, a U.K. network technology provider, revealed that of the 250 U.K. IT directors and managers it surveyed across a range of sectors, 84% said that their businesses had experienced unplanned connectivity outages due to unreliable network infrastructure in the last 12 months, while over half found significant security concerns over adopting cloud services. It did also find that of the 79% of businesses that currently use cloud services, 84% see cloud computing as key to increasing productivity.
“Moving to cloud services can save companies time and money, but if your network layer is not sufficiently robust the result is more likely to be greater downtime and revenue leakage,” said Lee Wade, chief executive of Exponential-e.
“For financial services companies, downtime can also result in regulatory infringement, fines and other penalties.
“I am personally surprised by the number of businesses who still consider access across public networks to be ‘good enough’, even though it renders them susceptible to data security breaches, spikes in demand and all manner of vagaries the public internet leaves you open to.”
To address these concerns, a number of vendors are starting to offer new solutions in the cloud. These ‘private’ clouds avoid data privacy issues by safely allowing sensitive data to reside there.
For instance, Bloomberg recently launched the latest extension to Bloomberg Vault, its cloud-based information management service that is available globally. Called Local Vault, it aims to abide by all regional data privacy guidelines.
“Bloomberg Local Vault is the first truly global service capable of ensuring that the widely-varying regional and national regulations for data storage and transfer are met,” said Harald Collet, global head of Bloomberg Vault, in a statement.
Many multinational organizations, particularly those with European operations, have difficulty managing sensitive electronic data while adhering to data regulations.
“European enterprises are looking to cloud providers, such as Bloomberg, to remove the barriers to cloud adoption, including those posed by data privacy laws,” said Chris Dale of the e-Disclosure Information Project, a U.K. website that disseminates information about electronic disclosure.
Others, too, such as Netherlands-based data center provider Interxion, are beginning to see tangible benefits from cloud technology. It recently saw third quarter profits rise by 14% and much of this was attributed to custom from cloud service providers and the financial services industry.
“Our market strategy that focuses on creating value for our customers by building communities of interest continues to pay off,” said David Ruberg, chief executive of Interxion, in a statement.
“We saw particular strength from cloud service providers and financial services segments who derive value in their own businesses from the rich, low latency connectivity and robust communities of interest available in our highly reliable data centers.”
Customers can now access an expanding library of datasets via cloud APIs.
FINRA’s Office of Financial Innovation reviewed nearly 40 broker-dealer firms.
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Firms are increasingly moving to more agile technology, microservices, and data models.
Workloads supporting retail, commercial and investment banking, and wealth management will move.