AWS for Industries
Financial Market Infrastructure Providers Cloud Adoption Trends for 2H24
As we look forward to the start of a new year, we wanted to reflect on cloud adoption trends from Financial Market Infrastructure providers (FMIs) for the second half of 2024.
Over the last six months, FMIs, such as exchanges, clearing houses (CCPs) and security depositories (CSDs), accelerated migrating critical workloads across all business lines to AWS, and increasingly launched production Generative AI (GenAI) use cases.
FMIs and capital markets firms see the cloud and GenAI as twin strategic differentiators for their businesses. With this perspective, FMIs have fast-tracked large, strategic technology decisions and are moving quickly to execute on their visions. They are leveraging AWS to access and process large volumes of data and power analytics in near real time to scale workloads, such as research, billing, surveillance, and risk systems, and speed up their time to insights at economic costs. FMIs are also modernizing and launching new agile trading platforms, streamlining core post-trade settlement and clearing applications, and building innovative new services with AI, ML, and GenAI on AWS. Below we detail some of the more notable customer announcements in the trading, post-trade, data distribution, and GenAI spaces. This blog also outlines AWS services FMI customers are leveraging to transform their businesses.
At AWS re:Invent 2024, AWS announced a range of new services with particular emphasis on GenAI (Top announcements of AWS re:Invent 2024 and Recap guide for Financial Services). Notable key announcements include AWS Tranium3, AWS’s next-generation AI chip, and Amazon Nova, a new family of foundation models built by AWS that can process text, image, and video prompts. With AWS Tranium3 and Amazon Nova, FMIs gain additional, high-performant solutions to build and scale AI applications. AWS and Oracle announced OracleDatabase@AWS, a strategic partnership with Oracle, enabling customers to access Oracle Autonomous Database on dedicated infrastructure and Oracle Exadata Database Service within AWS. AWS continued expanding microsecond-accurate PTP hardware clock support, built on Amazon’s proven network infrastructure and the AWS Nitro System, to new Regions and instance types. Besides enabling microsecond-level observability for trading platforms, this will enable customers who run globally distributed databases and storage systems to more easily architect in-region and cross-region scalability features while also simultaneously simplifying technical designs.
Trading Platforms
Exchanges, liquidity providers, brokers, and market participants are increasingly running markets on AWS, with new announcements in 2H24. TP ICAP signed a multi-faceted strategic partnership with AWS, which will see TP ICAP migrate 80% of their workloads to AWS. A key focus of the partnership will speed up the modernization of Fusion, TP ICAP’s market-leading electronic trading platform. Boerse Stuttgart announced a strategic partnership with AWS, and will migrate their digital asset trading infrastructure to AWS. The partnership will enable Boerse Stuttgart to boost its product offerings for European financial institutions, enhance scalability and streamline expansion. Scalable Capital launched a new European equity stock exchange, the European Investor Exchange (EIX), which runs on AWS and is fully integrated with their retail investment and trading platform. Abaxx exchange went live with its Singapore-based commodities market, fully hosted on AWS.
Post-Trade Applications
FMIs continue to migrate core post trade and surrounding systems to the cloud. LSEG shared their approach to blue-green deployments for Amazon Aurora PostgreSQL global databases to speed up innovation and minimize deployment times for internal applications. The Securities and Exchange Commission (SEC) granted KOR Reporting a Securities Based Swap Data Repository (SBSDR) license for all asset classes and servicing all client segments. KOR previously received a similar license from the Commodity Futures Trading Commission (CFTC), and with this license from the SEC, KOR is the second cloud-based SBSDR after DTCC, both of which run on AWS. EDX Markets announced it partnered with Adaptive for its cloud-native clearing and settlement platform. Adaptive built and launched the platform on AWS in under 5 months. DTCC submitted its filing with the SEC to host a specified set of core clearance, settlement, and risk applications, including any Regulation Systems Compliance and Integrity (“Reg. SCI”) systems and Critical SCI systems on AWS.
Data, AI, ML & GenAI
Data, Artificial Intelligence (AI) and Machine Learning (ML), especially GenAI, remain hot topics in the industry and for FMIs. LSEG migrated their historic PCAP dataset to AWS, saving 80% on hosting costs and providing their customers with increased optionality in how they access and consume LSEG’s data. Bloomberg built virtual data rooms on AWS, which enable secure data trialing without the risk of exfilitration. These virtual data rooms provide customers with a pre-provisioned, fully AWS native environment where customers interact immediately with Bloomberg’s data catalog, without the need to install software, download files, or onboard files, which speeds up the evaluation process.
Crypto.com built a multi-agent consensus-seeking solution that uses multiple LLMs hosted on Amazon Bedrock to generate sentiment analysis and news categorization for a range of cryptocurrencies supported by their platform in under a second. They tailor the feeds to the user’s trading level and the coins in their wallet. At the AWS New York Financial Services Symposium in New York, DTCC shared how they were using GenAI and Amazon Q Developer for code generation.
Nasdaq and AWS published success stories detailing how Nasdaq is innovating its financial solutions by implementing AWS generative AI to drive innovation, efficiency, security, and sustainability. The stories highlight how Nasdaq is enhancing market surveillance, driving sustainability insights with AI-powered ESG solution: SustainableLens, and helping HTLF Bank investigate entities in seconds, leveraging Nasdaq Verafin – all powered by Amazon Bedrock.
Previous Installments of the FMI Cloud Adoption Blog
Recent Whitepapers, Blogs, and Webinars
- How Aquis created a cloud-native exchange to meet the highest regulatory requirements on AWS
- How CSD BR Became the First Brazilian FMI to Migrate Highly Regulate Workloads to the Cloud
- Running an Exchange in the Cloud [White Paper]
- Capital Markets on AWS [eBook]
- World Federation of Exchanges: Next Generation Market Infrastructure
- Gaining Microsecond Advantage: How Amazon EC2’s Precision Timekeeping Empowers Flow Traders
- 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
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 the 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, Scalable Capital launches EIX
- 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), TP ICAP strategic partnership
- Select Crypto: Coinbase, Bistamp; Crypto.com, Boerse Stuttgart
- Other: JPX Carbon Market; 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; Broadridge process $10T in settlements a day on AWS; LSEG migrates risk calculation and assessment system for ForexClear to AWS; Torestone on AWS, EDX Markets clearinghouse runs on AWS
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, KOR Reporting granted SBSDR license, LSEG blue-green deployments for Amazon Aurora PostgreSQL
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 algorithm testing environment
Data Distribution (Historical/ Non-Real Time, Real Time, Multicast)
- Historical / Non-Real Time: NYSE Cloud, LSEG Tick History and PCAP data 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: 1) Bloomberg B-Pipe 2) Refinitiv Elektron on AWS 3) Cboe Global Cloud 4) Nasdaq Cloud Data Service 5) Exegy Vela Platform 6) JPX Arrownext Connectivity
- Multicast: Colt Market Multicast; CJC PoC, Swxtch.io
HPC, AI, and ML
- Dev/Test: Deutsche Borse T7
- (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
- (Select) Gen-AI: NYSE Regulatory Chat-Bot and NYSE Launchpad (re:Invent 2023), Nasdaq (Verafin) Gen AI-powered anti-financial crime (re:Invent 2023), Finra GenAI for software development life cycle (re:Invent 2023), Nasdaq GenAI Sustainability Lens, Nasdaq GenAI-enabled Surveillance, Crypto.com built a multi-agent consensus-seeking solution on AWS, DTCC using GenAI and AmazonQ Developer