AWS for Industries
Financial Market Infrastructure Providers Cloud Adoption Trends for The First Half of 2024
This blog post has been adopted from a Newsletter Released in the summer of 2024
With warm temperatures in New York, we took a few moments to reflect on a busy first half of the year from a cloud adoption perspective for Financial Market Infrastructure providers (FMIs). Exchanges, clearing houses (CCPs) and security depositories (CSDs) deployed diverse workloads on Amazon Web Services (AWS) in the first half of 2024. Customers continued to focus on integrating artificial intelligence (AI), particularly Generative AI (GenAI), across their business lines. There were many notable customer announcements from across the trade lifecycle, which we detail below. AWS also made notable technology announcement in the first half of 2024. AWS cut data transfer fees when customers move out of AWS. AWS expanded microsecond-accurate PTP hardware clock support, built on Amazon’s proven network infrastructure and the AWS Nitro System, to 87 additional EC2 instance types and extended the feature to US East (N. Virginia). AWS went live with the Direct Connect point of presence (PoP) in Aurora CyrusOne for our Chicago Local Zone.
AWS published several capital markets thought leadership pieces, including AWS’s inaugural Running an Exchange in the Cloud White Paper, AWS’s Capital Markets eBook, an article in the Tabb Forum, as well as several FMI customer blogs (below).
Trading Systems in the Cloud
Exchanges continue to launch and operate their markets across all asset classes on AWS. Since the beginning of the year, there have been many go-live announcements. Osaka Digital Exchange (ODX) went live its digital asset exchange on AWS. Powered by “START,” a proprietary trading system, ODX is Japan’s first secondary trading market for tokenized securities. Following its technical blog post in December 2023, OneTrading went live with a cloud-native colocation environment on AWS using shared cluster placement groups (shared CPGs). CarbonPlace went live with their carbon credits market, powered by Yaala Labs’ P8 matching engine on AWS. AWS and Yaala Labs published a blog post detailing the decision decisions and benefits they achieved by building P8 on AWS. TP ICAP also launched its Carbon Trading Services on AWS, while also sharing in an AWS case study that they reduced carbon emissions by 31% after migrating 50% of their workloads to AWS.
Post-Trade
In the post-trade space, exchanges, CCPs, and CSDs continue to migrate core post trade and surrounding systems to the cloud. The Johannesburg Stock Exchange (JSE) announced that they were collaborating strategically with AWS to modernize their Broker Dealer Application (BDA), which powers a range of their post-trade workflows, risk systems, and surveillance platforms. The London Stock Exchange Group Clearing division (LSEG LCH) published a blog on chaos engineering testing done with AWS to enhance resiliency of core post-trade systems.
Data and Analytics
FMIs and data aggregators continue to leverage the cloud to host their data sets, grow their businesses and innovate. The JPX provided an update on the build-out of J-LAKE, which is their central repository for all JPX data that will serve internal and external /customer uses. J-Lake, built on AWS, centralizes the management and distribution of all JPX’s data assets. JPX expects to go-live with this platform before year-end. LSEG published a blog showing how customers are using high-fidelity OPRA data from LSEG’s Tick History-PCAP to perform transaction cost analytics using Amazon Athena for Apache Spark. Euronext launched their cloud-based real-time market data solution, the Euronext Optiq MDG Cloud, on AWS. Similarly, the NYSE went-live with their cloud-based real-time market data feed NYSE Cloud Stream on AWS. Colt announced customers can now access the SGX’s derivatives data in AWS through their multicast solution, Market Data in the Cloud, launched in 1H23.
AI & ML and Generative AI
Artificial Intelligence (AI) and Machine Learning (ML), especially Generative AI (GenAI), remain hot topics in the industry and for FMIs. Nasdaq published a case study describing how their recently launched ESG intelligence solution leverages Amazon Bedrock to use GenAI to provide customers with on-demand insights from over 9,000 companies’ sustainability and financial documents, access to an ESG Assistant to answer questions on regulations, peers sustainability performance, industry best practices, and perform benchmarking and gap analyses. Nasdaq also announced that they are incorporating GenAI into their surveillance offering. By using GenAI, Nasdaq saw circa 33% reduction in investigation time and improved overall outcomes during proof-of-concept testing (more details here). Verafin, a Nasdaq company, launched the co-pilot tool for their anti-financial crime platform. This tool runs on AWS and helps reduce the time investigators spend on alert reviews by 90% by automating tasks related to research, summarization, and documentation. Following on from their GenAI presentation at re:Invent 2023, NYSE shared how they’re using Amazon Bedrock to summarize the news, conduct sentiment analysis, and then assess and analyze stock price movements.
Recent Whitepapers, Blogs and Webinars
- Running an Exchange in the Cloud
- Capital Markets on AWS
- World Federation of Exchanges: Next Generation Market Infrastructure
- How The New York Stock Exchange built its real-time market data platform on AWS
- How Yaala Labs Built a Cloud Native Exchange Platform on AWS
- One Trading and AWS: Cloud-native colocation for crypto trading
- Low Latency cloud-native exchanges
- Aeron performance enables capital markets to move to the cloud on AWS
- It’s About Time: Microsecond-Accurate Clocks on Amazon EC2 Instances
- Crypto market-making latency and Amazon EC2 shared placement groups
- How Exberry built a cloud-native matching engine on AWS that can process 1 million trades per sec, with 20 microseconds latency
Select Public References
Trading Systems in the Cloud (Markets)
- Equities and Derivatives: Nasdaq to Migrate Markets to AWS (Equities and Options), Nasdaq goes live with MRX on AWS Outposts (Options), Nasdaq migrated GEMX (Options); Astana International Exchange (Equities), Aquis migrates markets to the cloud and becomes the first recognized investment exchange (RIE) to run in cloud (Equities), Exberry Cloud Native Matching engine on AWS (Multi-asset), SGX and Aquis Market Pilot (Equities, multi-asset), BIVA Announces it will move all of its infrastructure to AWS
- FICC Market Places: Nasdaq Bond Exchange (bonds), LTX moves bond platform to AWS (bonds), Trumid (bonds), National Australia Bank (FX), BJSS Low Latency Trading Platform on AWS (FX), Abaxx Commodity Exchange (Commodities)
- Select Crypto: Coinbase, Bistamp; Crypto.com, Osaka Digital Exchange (ODX)
- Other: JPX Carbon Market; CarbonPlace (Carbon Credit), TP ICAP (Carbon Trading), Bolsa de Colombia’s A2scenio SMB Market
Post-Trade Systems: Core settlement and clearing
- OCC Receives Notice of No Objection for Core settlement risk and data platform to move to AWS, Johannesburg Stock Exchange (JSE) modernizes BDA with AWS, Broadridge process $10T in settlements a day on AWS, LSEG migrates risk calculation and assessment system for ForexClear to AWS, Torestone on AWS, LSEG LCH Chaos Engineering
Post-Trade Systems: Surround Systems (Surveillance, risk, billing & reporting, client billing, analytics)
- Finra (1. Surveillance System), Finra (2. Order Audit Trail System), Finra (3. Consolidated Audit Trail [CAT]), Nasdaq surveillance, risk, billing and reporting; Euronext surveillance and analytics, Euronext Securities (CSD) builds a data lake and leverages ML to power analytics on AWS, NYSE Surveillance, DTCC Trade repository, B3 Trade Notes Registration System
Data Analytics
- Deutsche Borse A7 Analytics Platform, Goldman Sachs (1. Goldman Sachs Financial Cloud for Data), Goldman Sachs (2. Cloud Journey), JPX Data and analytics platform, JPX Data Sandbox, LSEG/Refinitiv Market Impact Tool, ULTUMUS data and analytics platform, Bombay Stock Exchange real-time algo testing environment, JPX J-LAKE
Data Distribution (Historical/ Non-Real Time, Real Time, Multicast)
- Historical / Non-Real Time: NYSE Cloud, CME, Goldman & LSEG, Factset Tickerplant, Nasdaq Market replay, BIVA Cloud, JPX Investor Event Coverage
- LSEG migrated their historic PCAP dataset to AWS, Bloomberg built virtual data rooms on AWS
- (Near) Real Time: Bloomberg B-Pipe, Refinitiv Elektron on AWS, Nasdaq Cloud Data Service, Cboe Global Cloud, Euronext Optiq MDQ Cloud, NYSE Cloud Streaming, Exegy Vela Platform, JPX Arrownext Connectivity
- Multicast: Colt Market Multicast; CJC PoC, Swxtch.io
HPC, AI&ML
- Dev/Test: Duetsche Borse T7, BIVA Moves DR to AWS
- (Select) AI/ML: Nasdaq D-Melo (re:Invent 2023), LSEG Market Impact tool, LSEG Real-time News Enrichment, HSBC AI-based Index, Trumid, Bridgewater, Morningstar, NYSE Launchpad (re:Invent 2023)
- (Select) Gen-AI: NYSE Regulatory Chat-Bot (re:Invent 2023), NYSE (Sentiment Analysis), Nasdaq (Verafin) Gen AI-powered anti-financial crime (re:Invent 2023), Finra GenAI for software development life cycle (re:Invent 2023), Nasdaq Sustinability Lens, Nasdaq (Surveillance with GenAI