If you still think cloud computing isn't secure enough for financial services, then you've had your head in the ground. Modern cloud technologies have proven themselves against the highest security standards and auditor requests, spurring a wide range of financial services companies to jump on board. Of course, the cost savings don't hurt either.
Nasdaq OMX has announced that Jordan & Jordan will now run their Execution Compliance & Surveillance (ECS) on FinQloud, their cloud computing platform. This not only marks the first compliance service to use FinQloud, but points to a shift towards cloud platforms within the finical community which until recently was laden with skepticism for its ability to meet security standards.
FinQloud is marketed as a secure, cloud computing platform designed exclusively for the financial services sector and powered by Amazon Web Services (AWS). Since its launch, the platform has taken on 19 financial clients, according to Nasdaq OMX. Julia Sears, AVP of FinQloud at NASDAQ OMX, she during a phone interview that she expects to have 21 clients by the end of this week.
[For more on how FinQloud is being used by financial services, read: Tradier Launches Cloud Brokerage In A Box on FinQloud, AWS to learn more.]
Sears says they're seeing a shift in organizations looking to meet compliance regulations. For compliance purposes, a company needs to know their data has never been changed and is completely accurate for auditors. "We have a strong pipeline," says Sears. She adds that FinQloud has been contacted by financial regulators as well.
Interestingly, the greatest hold-up to on boarding new clients, once thought to be purely security related, is the client's infrastructure. Sears explains that once FinQloud has proved that it is secure and able to meet client needs, and is also compliant with the SEC and other regulators' requirements, there is a lot of discussion about provisioning the environment and getting set up. "We work with that, make sure they're comfortable, that's just part of the process."
[For more on how Nasdaq FinQloud usage is being received by the financial services industry, read: Nasdaq OMX FinQloud R3 Meets SEC/CFTC Regulatory Requirements, Say Consultants to learn more.]
Michael O’Conor, Director of Jordan & Jordan (J&J), explains that his firm enables buy-side clients to demonstrate to regulators that their trades are in compliance. To do so, J&J provides analytics and network information that includes all trades and quotes on a particular day (an enormous and ever-growing pool of data). His firm was dealing with significant pressures to store that data and keep it readily available for regulator requests. "It was a logical for to move into FinQloud," he said in a phone interview. The switch enabled his firm to lower internal costs ("The costs were crazy," he says) and run their business more efficiently. According to Sears, clients are seeing an average 20-60% cost savings after switching to FinQloud.
"I think it's a logical shift," said O'Conor. "Early on people were not going to trade on the internet because they didn't trust it, but as technology improves you will see more firms look for cost efficient ways to do business as long as it meets a need. In respect to data storage, demands are huge, clearly FinQloud provides that to us. Are you going to see High Frequency Trading in the cloud? Not tomorrow, but this is logical first step."