Moving the share trading done at stock exchanges from costly physical servers to cloud computing (opens in new tab) services could save money and reduce potential outages according to a recent pilot program conducted by Amazon, Singapore Exchange SGX and the London-based Aquis Exchange.
The ecommerce giant's cloud computing arm AWS (opens in new tab) worked with the two stock exchanges to develop and test a proof of concept to show that trading shares in the cloud can be just as fast and reliable as doing so on on-premise servers.
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Director at Aquis Exchange's technology division Adrian Ip provided more details on the success of the pilot program to Reuters (opens in new tab), saying:
“It’s proven to be technically capable. We will be looking at how this can be scaled globally. We will take a considered and measured approach and discuss with regulators and members.”
According to Ip, Amazon had a breakthrough when it developed the ability to “multicast” or send data to many parties at the same time in the cloud as this is a key requirement for large stock exchanges.
The idea of moving stock exchanges to the cloud comes at a time when there have been outages in Japan, Australia and at Euronext in Europe this year despite the fact that exchanges spend millions on physical back-up servers. A cloud-based exchange though could be more resilient and would not require exchanges to rely on physical infrastructure dispersed across regions.
VP at AWS Mayumi Hiramatsu believes that the success of the pilot will show exchanges that there is another option besides maintaining on-premise infrastructure. Aquis and SGX are both looking at how they can further pursue findings from the pilot which they say could bring savings of up to 90 percent.
The only snag that could prevent exchanges from moving to the cloud is the fact that global regulators are now taking a much closer look at the way in which financial firms are increasingly relying on third party cloud providers for critical services with the EU (opens in new tab) likely to be the first to introduce new laws to regulate how the cloud is used in this way.
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Via Reuters (opens in new tab)