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

Select Public References
Trading Systems in the Cloud (Markets)

Post-Trade Systems: Core settlement and clearing

Post-Trade Systems: Surround Systems (Surveillance, risk, billing & reporting, client billing, analytics)

Data Analytics

Data Distribution (Historical/ Non-Real Time, Real Time, Multicast)

HPC, AI&ML

Alex Mirarchi

Alex Mirarchi

Alex Mirarchi is a Principal Capital Markets Industry Specialist at Amazon Web Services (AWS). Alex’s core focus is helping Global Exchanges and Financial Market Infrastructure (FMI) firms transform their businesses with AWS. He leads AWS’s business development for FMIs, trading and connectivity in the cloud and also supports asset managers, investment banks, broker dealers, and fintechs in developing their cloud strategies. Alex joined AWS from Oracle Cloud Infrastructure (OCI), where he was responsible for strategy and structuring programs and strategic partnerships with Independent Software Vendors (ISVs). Prior to Oracle, Alex worked in capital markets, selling Asian Equities to Hedge Funds in London with HSBC and in New York with Macquarie Group. Alex also held front office roles in Fixed Income and Foreign Exchange and started his career in HSBC Global Asset Management’s alternative investments division in London. Alex holds an MBA from Columbia Business School and is based in New York.