The last few months have seen unprecedented levels of volatility within financial markets, triggered by a global pandemic that has caused businesses to be temporarily shuttered, airlines grounded and all but key and essential workers to stay at home. The uniqueness of this situation has driven exceptional volume spikes across the global markets, plus government stimulus that has exceeded those seen in the financial crisis over a decade ago. Since that time markets have been strengthened to be in a better position to absorb such shocks; and regulatory measures, such as circuit breakers, have served their purpose in providing a temporary cooling off period to review and recalibrate systems and strategies.
At an infrastructure and systems level there have been investments and contingency plans to ensure there is sufficient capacity and headroom to navigate volatility, manage extreme volumes and maintain an orderly market. Since the 2008 financial crisis there has been an ongoing trend that shifts where responsibility for that capacity sits. With more firms switching to managed services or software/platform-as-a-Service (SaaS/PaaS) models, responsibility now sits with the provider rather than the subscriber. Furthermore, the resultant ability to provision additional capacity or more infrastructure is swift, simple and even transparent to the end user.
This service model will have enabled the ‘almost overnight’ switch to remote working to be more seamless for clients, with services already managed externally or by a third party and delivered as-a-Service. The obvious benefit being that the client’s focus remains on operating the areas of their business that differentiates them and the plumbing that powers it simply ‘continues to work.’
The sudden shift in operating models may well have a lasting effect on operations going forward; what was a long-term strategy, vision or aspiration is now a tangible short- to medium-term project, being delivered as the ‘new normal.’ One area this particularly seems to have accelerated discussions is around cloud adoption.
At Vela we’ve been investing in public cloud services for quite some time. The term Cloud can be all encompassing and it’s important to recognise it is not a one size fits all model; our strategy includes three key pillars:
Adoption of cloud platforms: Leveraging public cloud platforms to reduce our infrastructure costs whilst increasing our scalability. Our development environments, Continuous Integration (CI) & Quality Assurance (QA) environments and DevOps build and release processes all run within public cloud with the ability to instantiate a virtual machine on-demand and resources only running when required. We also host a number of our own applications, e.g. our client portals, in these environments.
Delivery to cloud platforms: Making our existing products and services available to client environments hosted with the major public cloud providers. This is something we already do today for a number of clients across our base of sell-side and buy-side firms that consume our services in their cloud environments.
Native cloud applications: Deploying truly cloud native versions of our technology stack running as a set of on-demand, containerised micro-services. As a financial services technology company with an API-first strategy this is a natural evolution for us.
The maturity of client deployments within public cloud environments will likely follow a similar trajectory. The short-term lift and shift of environments to public cloud providers should be coupled with a longer-term adoption of native cloud services to realise the full potential of this paradigm shift.
The recent days and months continue to highlight the efficiencies that clients can achieve in operations and responsiveness through a well-executed build and buy strategy that consumes managed market data and execution platforms and services to power their bespoke trading applications. Clients can reduce their operational costs and time to market, whilst ensuring their internal teams remain focussed on maintain their core differentiators.
In conclusion, it is clear that the industry’s increasing adoption of managed services over the last decade has played a key role in navigating its ability to respond dynamically to the unique infrastructure challenges in recent months. Looking forward the role cloud services play in further support of this is likely to become more relevant more rapidly than some had initially forecast.