AWS Case Study: NASDAQ OMX FinQloud
About NASDAQ FinQloud
The NASDAQ OMX Group, Inc., the inventor of the electronic exchange, has over 20 years’ experience delivering market technology and driving a culture of innovation. The company provides products and services that help fuel economies and manage the entire life cycle of a trade; risk management to trade execution, post-trade compliance, and surveillance to clearing. In the United States and Europe, NASDAQ OMX owns and operates 23 markets, 3 clearinghouses, and 5 central securities depositories supporting equities, options, fixed-income, derivatives, commodities, futures, and structured products. Globally, the company drives technology for more than 70 marketplaces in 50 developed and emerging countries, powering one in ten of the world’s securities transactions.
Through its work with financial services companies, NASDAQ OMX recognizes the complexity of the global regulatory landscape in which these firms are required to operate. Impending regulations often require increased transparency and the ability to provide regulators with access to increasingly detailed financial information. The costs of securely storing and managing vast amounts of data—especially in light of regulations, such as the U.S. Securities and Exchange Commission (SEC) Rule 17 a-4 (Books and Records), which require storage of certain regulated financial data for specific periods of time—have continued to grow, putting a potentially significant financial burden on many firms.
In response, NASDAQ OMX developed FinQloud, running on Amazon Web Services (AWS), to provide its clients with efficient storage and management of financial data. FinQloud helps firms streamline operations and meet regulatory compliance requirements without costly capital expenditures for infrastructure. With the FinQloud solution, the company leverages the secure, flexible, and cost-effective nature of the AWS Cloud in connection with NASDAQ OMX’s experience in providing technology and domain expertise to financial services companies.
Why Amazon Web Services
“Amazon Web Services is already being used by some of the largest organizations around the globe. When we were looking at potential cloud platform providers to deliver FinQloud, AWS became the clear choice due to their trusted, enterprise capabilities. We were impressed by their ability to deliver cost-effective solutions that scale to the volumes of data that our clients need to process in a timely manner. Our clients need help now and it made perfect sense for us to leverage the proven AWS Cloud platform to provide our clients with the cost savings they need as soon as possible,” says Ted Myerson, SVP and Global Head of Access Services, NASDAQ OMX.
Currently, AWS powers FinQloud’s Regulatory Records Retention (R3) data storage solution and Query, a data search and retrieval tool. According to NASDAQ OMX, FinQloud’s R3 is designed to provide a storage solution to help broker-dealers meet record archival and retrieval requirements (including Write Once Read Many, or WORM, compliance, as mandated under SEC Rule 17a-4) at a significantly lower cost than current non-cloud solutions. Data stored in the FinQloud R3 solution is encrypted using keys that are generated and stored on a separate hardware device designed to comply with WORM requirements.
Query complements the R3 solution by providing granular search-and-retrieval functionality for structured and unstructured data stored in FinQloud. The solution is designed to give broker-dealers the power to run fast, on-demand queries and facilitate efficient retrievals of stored data. Query helps process as much as petabytes of data quickly and efficiently in response to demanding, user-generated queries. Query uses virtual machines running on Amazon Web Services to host Hadoop job clusters via Amazon Elastic MapReduce (Amazon EMR) and Amazon Simple Storage Service (Amazon S3), as well as FinQloud’s R3 for data storage.
As an additional measure put in place to meet the stringent operational and regulatory security requirements of the financial services industry, all client connections to FinQloud are required to pass through a rigorous encryption key management system, which is housed in private NASDAQ OMX data centers before directly connecting to AWS. All data run through FinQloud is also subject to rigorous audit and integrity checks by NASDAQ OMX to confirm the system is working as intended and that data is not compromised.
FinQloud also takes advantage of Amazon Virtual Private Cloud (Amazon VPC) to create an isolated network layer where data is kept separate from other entities running on AWS or the public Internet. For further security, FinQloud places data from each client in a distinct storage container and implements a dedicated network connection to AWS using AWS Direct Connect.
In combination, NASDAQ OMX’s use of active encryption, Amazon VPC architecture, segregation of customer data and secure connectivity provides extra protection on top of the already robust AWS security framework. Figure 1 illustrates FinQloud’s architecture:
FinQloud draws on the proven enterprise cloud experience of AWS, serving a wide variety of customers operating in highly-regulated industries, and NASDAQ OMX’s extensive experience providing technology solutions to deliver an industry-specific cloud platform that is designed to meet the complex security and compliance requirements of the financial services industry.
“With FinQloud we leverage the secure, flexible, and cost-effective AWS Cloud infrastructure with NASDAQ OMX’s experience in providing technology and advisory services to exchanges, regulators and broker-dealers." Myerson continues, “By using the AWS platform, FinQloud can help NASDAQ OMX’s clients significantly reduce the operational costs and complexities associated with data and infrastructure management.”
Myerson adds, “This combined expertise enables NASDAQ OMX to deliver a solution that is tailored to our clients’ unique requirements in a secure, confidential, compliant manner. Additionally, the AWS Cloud offers flexibility and reliability that we are pleased to pass on to our clients.”
Furthermore, NASDAQ OMX describes the following benefits offered by FinQloud:
- Agility: FinQloud helps organizations be more agile and competitive by empowering them to easily scale computing resources and proactively respond to business opportunities that will drive revenue growth.
- Cost-Effective Data Storage: Customers may be able to significantly reduce the cost of data storage associated with technology, facilities and operational overhead. Using FinQloud, firms can easily scale their data storage and computing capacity to meet demand without the need to purchase and support additional infrastructure.
- Accessibility: FinQloud gives organizations centralized access to data that is often otherwise segregated across multiple data centers or in-house servers. Firms gain fast, on-demand data retrieval capabilities and retain a golden copy of all data.
- Cost Savings: FinQloud’s potentially dramatic cost savings and scalability allow firms to support growth without adding significant infrastructure. Scarce technology resources can often be redeployed to critical revenue-generating areas.
To learn more about how AWS and NASDAQ OMX FinQloud can help store, search, and retrieve financial data safely and securely, visit the Backup and Storage details page: http://aws.amazon.com/backup-storage/.
For more information about how the NASDAQ OMX's Global Data Products division uses Amazon S3 to deliver historical stock price information to customers, visit: http://aws.amazon.com/solutions/case-studies/nasdaq-omx/.