FX MYTHBUSTERS
FX Mythbusters: Cutting through the Cloud
Howard Tolman, Director of Cloud Trading Technologies tackles some questions on the application of Cloud Computing services within the FX trading environment.
It’s too early for us to be using Cloud services. Wouldn’t it be better for us to wait and see if this thing is really going to catch on amongst other FX sell-side providers and for the technology to mature?
Well the cloud has already taken off in a lot of different areas. One has to ask why the FX arena should be any different. Generally speaking the applications are unchanged and have the same functionality on the cloud as off it. However from an operating point of view cloud offers high availability and fault tolerance as standard as well as massive scalability. Cloud has also been around for a number of years already and is becoming far more sophisticated and powerful by the week.
We hear that cost savings are a key business benefit of using Cloud computing in other industries but these advantages won’t necessarily translate to FX will they?
Cost is of course one of the major advantages of using the Cloud but I don’t think it is generally understood how much difference it can make. A recent survey by Gartner pointed out that IT costs in banks were some 250% higher than outcomes in non banking companies. Tis type of gap is the difference between being massively profitable and turning in very good results. In fact trading activities, particularly those
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which are developed in house, are fiendishly expensive to develop and run largely for a number of different reasons. Pay as you use services could almost have been designed for financial market trading activities because of the need to deal effectively with spikes in transactional volumes. Cloud also opens up the possibility of electronic trade distribution for banks that otherwise could not justify the budget. It is truly a game changer and could in some cases prove to be an existential threat to those institutions that intend to compete using traditional methodologies
Wouldn’t Cloud computing mean loss of operational control which could be bad for our day to day brokerage activities?
Te short answer here is no. Why should there be any loss of operational control. Te applications are just as transparent to operational staff as anything which is hosted internally while at the same time the high availability, fault tolerance and scalability mean less IT problems for administrative staff and greater reliability for front office activity. .
The technical reliability aspects of Cloud computing worry us as we need guaranteed uptime of our mission critical FX systems and services. Can any Cloud provider really meet our high service level requirements?
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