Upstox Powers High-Speed Trades in Seconds with AWS
A No-Frills Approach to Trading
Investing in the stock market can be confusing and daunting, not only for first-time traders but for seasoned investors as well. Not to mention, investing can be costly when you consider high brokerage fees which, in India, have become a major barrier for small investors. Enter Upstox, a India-based discount brokerage firm that saw an opportunity for hassle-free trading using design and technology to reduce costs for its customers. The firm refers to itself as a technology-based firm in the financial services space that empowers customers with tools and insights for savvier investment decisions.
“With AWS, our goal is to consistently maintain 99.99 percent platform stability providing information at the highest speed, empowering traders and investors to make accurate decisions at the right time.”
Cofounder and Chief Technology Officer, Upstox
Facing Initial Cloud Challenges
It is often said that time is money, especially when it comes to trading. To maintain its customers’ trust and confidence, Upstox has to ensure a consistent high performance of its trading platform so that customers have the information they need at their fingertips to make decision-making easier and faster. Initially, an on-premises trading platform that pulled data from the National Stock Exchange of India and the Bombay Stock Exchange served that purpose, but it proved temporary. As Shrini Viswanath, cofounder and chief technology officer of Upstox, explains, “We started growing rapidly and saw scalability and bandwidth issues on the horizon that could affect our ability to execute trades in seconds.”
Making the Switch to Ensure the Best Trades
To avoid the threat becoming a reality, Upstox decided to move its trading platform to the cloud to gain the scalability and bandwidth required to support expansion. Specifically, the firm turned to Amazon Web Services (AWS), whose Asia Pacific (Mumbai) Region would ensure that data stayed in India, in line with financial regulations. Viswanath notes, “AWS was already well established in the country and offered a wide range of mature services to companies in financial services.”
Before Upstox could press ahead with the migration, it had to fulfil one requirement. Under India’s law, the servers pulling data from the Indian stock exchanges had to remain on premises. “We needed a connection between the servers and the cloud that could handle major trading fluctuations, as data coming in can ramp up by several gigabytes,” says Viswanath.
Upstox found an answer in AWS Direct Connect, an AWS Cloud solution that establishes a dedicated network connection from AWS to on-premises data centers. Viswanath recalls, “With direct access from AWS to servers over a private line, it didn’t matter if trading suddenly fluctuated and market information coming in spiked because AWS Direct Connect offered massive bandwidth to ensure our trading platform would remain unaffected. Customers would get the information they needed in time to make the best trades.”
Significant Savings on Data Center Costs
Besides ensuring Upstox stayed compliant with data regulations, the AWS Asia Pacific (Mumbai) Region also offered Upstox a solution to an upcoming challenge. As Upstox continued to expand, it was crucial that the firm store data in a separate location to ensure business continuity and disaster recovery (DR) and to meet the required data protection levels.
With two AWS Availability Zones in the Mumbai region, Upstox was able to address its DR needs. Moreover, when AWS announced its third availability zone in May 2019, Upstox had its data protection strategy covered. Viswanath says, “We have gained significant savings by avoiding a secondary data center set up. And that doesn’t include the cost of making sure that all the hardware in the data center delivers the same level of reliability that AWS offers. With AWS, we get that elasticity without having to invest in hardware upfront.”
Maintaining Platform Performance During Peaks
During peak periods when markets open and close, traffic can be volatile—sometimes increasing by threefold or fivefold—with more traders logging in than normal. By using Amazon Elastic Compute Cloud (Amazon EC2) Auto Scaling, Upstox’s platform performance is maintained during those peak periods. Viswanath says, “Our IT needs to be able to respond to those changes instantly—it’s non-negotiable. With Amazon EC2 Auto Scaling, we don’t have to worry about manually scaling our infrastructure to meet an increase in traffic; everything is done for us.”
Previously, Upstox’s trading platform’s applications ran on Amazon EC2 instances, but Upstox has recently started to incorporate serverless services from AWS such as AWS Lambda to run its platform’s charts feature. These charts graphically display price changes, historical highs and lows, and trading volumes. Viswanath comments, “By running our charts on AWS Lambda, the charts are loaded at the same high speed throughout the day, regardless of the number of requests from customers.”
Enabling a 72% Increase in App Users
In the same year Upstox migrated to the AWS Cloud, it launched its Upstox Pro Mobile app. Built for both iOS and Android operating systems, the app provides similar functionality to the desktop experience, allowing users to analyze their stock positions and make trades. Thanks to the scalability of AWS, Upstox has been able to meet its continuous growth, with 85 percent of trades placed through its mobile app. “The number of monthly active users jumped by 72 percent in the second quarter of 2020, and app usage has generally increased across the country. We wouldn’t have been able to meet that increase without the flexibility of AWS,” highlights Viswanath.
The cost-effectiveness of AWS solutions also allows Upstox to drive app development. “We use A/B testing to compare customer reactions to new app features, and we store the features to be tested in buckets on Amazon Simple Storage Service (Amazon S3), which provides a low-cost, reliable solution which we can toggle on and off to measure user reactions,” Viswanath adds.
Setting Sights on Two Million Customers
And it doesn’t stop there for the business. In 2019, Upstox launched its high-speed Margin Trading Facility (MTF), where users can activate the MTF in just three clicks and conduct trades in as quickly as 10 seconds. The company is also building out its analytics capabilities using Amazon Redshift for greater insight into customer journeys. Data from across the business—including on its mobile app and website—is stored in Amazon Redshift, with in-house services querying the data for specific views.
Another process Upstox needed visibility into was onboarding users on its website. “We discovered through analyzing data in Amazon Redshift that sign-up processes on our website were slow. We fixed that immediately and conversion rates increased by 5–10 percent,” Viswanath says.
The business is growing at a phenomenal pace and has seen its customer base grow tenfold since June 2018. “We are growing at a fantastic speed, and expect to cross the two million customer mark at the end of 2020. With AWS, our goal is to consistently maintain 99.99 percent platform stability providing information at the highest speed, empowering traders and investors to make accurate decisions at the right time,” Viswanath concludes.
Upstox is a tech-first discount broking firm in India that provides trading services across different segments, including mutual funds, equities, commodities, futures, and options.
Benefits of AWS
- Gains fast, reliable connectivity to market data
- Scales IT automatically to line with trading
- Gains significant savings on data center costs
- Supports 72% growth in monthly active mobile app users
- Drives app development with low-cost storage
- Conducts trades in as fast as 10 seconds
- Increases conversion rates by 5–10% using analytics
AWS Services Used
AWS Direct Connect
AWS Direct Connect is a cloud service solution that makes it easy to establish a dedicated network connection from your premises to AWS. Using AWS Direct Connect, you can establish private connectivity between AWS and your datacenter, office, or colocation environment, which in many cases can reduce your network costs, increase bandwidth throughput, and provide a more consistent network experience than Internet-based connections.
Amazon Simple Storage Service
Amazon Simple Storage Service (Amazon S3) is an object storage service that offers industry-leading scalability, data availability, security, and performance. This means customers of all sizes and industries can use it to store and protect any amount of data for a range of use cases, such as data lakes, websites, mobile applications, backup and restore, archive, enterprise applications, IoT devices, and big data analytics.
AWS Lambda is a serverless compute service that lets you run code without provisioning or managing servers, creating workload-aware cluster scaling logic, maintaining event integrations, or managing runtimes. With Lambda, you can run code for virtually any type of application or backend service - all with zero administration. Just upload your code as a ZIP file or container image, and Lambda automatically and precisely allocates compute execution power and runs your code based on the incoming request or event, for any scale of traffic.
No other data warehouse makes it as easy to gain new insights from all your data. With Redshift, you can query and combine exabytes of structured and semi-structured data across your data warehouse, operational database, and data lake using standard SQL. Redshift lets you easily save the results of your queries back to your S3 data lake using open formats, like Apache Parquet, so that you can do additional analytics from other analytics services like Amazon EMR, Amazon Athena, and Amazon SageMaker.
Companies of all sizes across all industries are transforming their businesses every day using AWS. Contact our experts and start your own AWS Cloud journey today.