The Future of Financial Markets: Getting Ready for the Next Level of Cloud Usage

By Michael Girg, Chief Cloud Officer, Deutsche Börse [FRA: DB1]

Michael Girg, Chief Cloud Officer, Deutsche Börse [FRA: DB1]

The evolution of digitalization is leading to challenging transformational processes at an ever-increasing pace, and not only in the financial services industry. How does a market infrastructure provider and international exchange organization like Deutsche Börse deal with these transformations? And what technologies are crucial for our business as well as the broader financial services industry? Technological innovation has always been a part of our DNA. Our core expertise is to deliver operational excellence with high process reliability and stability at scale. Deutsche Börse, therefore, made the further exploration of new technologies, which is one of the key pillars of its growth strategy.

The focus here is on four new technologies – DLT, Cloud, Big Data and Advanced Analytics, and Automation – to foster innovation for both our existing businesses and new markets. As a key technology, cloud services will accelerate the push into new technologies and enable major initiatives. Cloud services will allow for developing and running blockchain-based services wherever required. Public cloud components in big data/ analytics solutions accelerate the analysis of large data sets and the usage of specialized services for machine learning, to name a few. In order to drive this forward and to unfold the benefits of cloud technology, the company embarked on its journey to the cloud.

The Specific Benefits of Shifting to the New Technology

The main advantages include improved agility, i.e.’ the possibility to provide more scalable infrastructure and much faster. In addition, using cloud technology, we can develop new functionalities faster and bring them to market maturity. We also see an opportunity to automate more and leverage the efficiencies that the cloud offers. It allows concentration on the business topics and, via standardization, reduces system-induced complexity to a large extent.

Overall, the cloud is an important enabler for innovation and empowers us to implement key new technologies, which are much more difficult to set up without the availability of unlimited computing power, unlimited storage, and the democratization of frameworks.

As a key technology, cloud services will accelerate the push into new technologies and enable major initiatives

Deutsche Börse decided to follow a multi-vendor strategy for cloud usage, allowing us to make use of the best services and strengths of each for every individual use case, and to ensure portability. When entering the first partnership with Microsoft in 2019, Deutsche Börse was an early mover in the financial services industry, closing a regulatory compliant contract for migrating regulated workload into the cloud. With Google, we have a further strong partner on board to provide cloud services. Furthermore, Google’s state-of-the-art security and transparency capabilities will enable us to co-develop solutions for security and data privacy. Here we aim to lead in the financial services industry. Having two powerful partners on board allows us to extend and to deepen our cloud usage.

Whenever a new technology comes into play, trust is an essential prerequisite to ensure acceptance in the markets. We see it as our responsibility to create this trust in the markets of today and tomorrow, which is why security and compliance are of utmost importance. We know that these aspects are always a moving target in financial services. Ensuring our data and that of our customers receive the highest levels of protection, therefore, counts as a top priority. Besides, a broad dialogue with all involved parties is very important.

In light of this, a key characteristic of our approach is the idea of partnership. This is firmly anchored in our corporate strategy and shapes our actions at all levels – including when it comes to meeting the opportunities and challenges of digitalization. Through our collaborative approach and deep involvement with multiple regulators and authorities, we were able to address remaining gaps and to create a first-of-its-kind contractual framework. With this, we are also paving the way for cloud adoption for many others by providing new contractual standards. And, of course, our journey does not end here as we are looking forward to expanding our collaboration and adding new partners.

Another good example of how partnerships can help to overcome common challenges is the collaborative cloud audit group (CCAG). EU financial institutions are required by regulation to ensure unrestricted audit rights and the capability to perform audits when they outsource material workloads to cloud service providers. As a result, Deutsche Börse initiated the CCAG in 2017 to comply with these regulatory requirements. The collaborative audit group performs such audits in a collective manner, significantly reducing the effort for both financial institutions and cloud service providers. This industry-wide initiative includes about 30 large EU financial institutions and insurance companies.

In a nutshell, the cloud sets the foundation for innovation and empowers us further to shape the future of our digital financial services. Cloud is already happening at a large scale and impacting the way we work and how we serve our customers.