Mar 1, 2013

Cloud Ready Financial Services - How Asian Banks, Hedge Funds and IT Roles Are Adopting and Adapting

Watch The Video: Cloud Ready Financial Services - How Asian Banks, Hedge Funds and IT Roles Are Adopting and Adapting

In a recent AsiaRisk article, Asia Looks to Cloud Computing, Clive Davidson discusses how rapid growth in Asia has driven several banks, hedge funds and asset managers to pioneer the adoption of cloud infrastructure over investment in internal infrastructure. The article explores benefits and regulatory discussions now centered around the adoption of the cloud in financial services.

We explore some of the drivers for the growth of cloud in Asia with Mike Opal, Cloud Evangelist for Microsoft. He joins Numerix host and Chief Marketing Officer, Jim Jockle, to dig into how Asian banking infrastructure is being transformed by cloud adoption - as well as asset management firms and hedge funds - and the changing role of the IT professional in this cloud and data driven landscape.
Weigh in and continue the conversation on Twitter @nxanalytics, LinkedIn, or in the comments section below.


Numerix Video Blog Transcript – Cloud Ready Financial Services - How Asian Banks, Hedge Funds and IT Roles Are Adopting and Adapting

Jim Jockle (Host): Hi welcome to Numerix Video Blog, I'm your host Jim Jockle. With me today, Cloud Evangelist from Microsoft, Mike Opal, Mike welcome back to the blog.

Mike Opal (Guest): Thanks for having me back.   

Jockle: Mike I want to talk a little bit, there was an article in AsiaRisk written by Clive Davidson and I'm going to read a little bit about it, just to frame up todays discussion and the article for your reference to look it up from AsiaRisk, "Asia Looks to Cloud Computing". And the highlight of this was Cloud Computing promises performance enhancements and cost efficiencies and to transfer all the headaches of system implementations, maintenance, and upgrades away from user organizations to Cloud service providers, jumping ahead it says given these challenges, a number of banks in the region are pioneering the use of Cloud to support their operations with the Common Wealth Bank of Australia, National Bank of Australia, leading the way and some hedge funds and other buy-sides firms are following suite. The article also delves into complex calculations that require computational power like counterparty risk and economic calculations as it relates for regulations, but it spurs the question and I know you span the world, is the tail wagging the dog in terms of emerging markets really looking to Cloud as a key solution in expanding their financial services platforms.

Opal: Yeah that's a great, great point and actually one of the most interesting 'aha' moments I think I've had in the last couple of months is realizing how actually nation states are looking to Cloud for competitive advantage, particularly in Asia. If you think about Asia over the past decade, maybe 15 years, the growth has been absolutely epic. The growth from almost impoverished nations to very wealthy nations with a burgeoning western-style middleclass has been tremendous. However, that's really all been centered in urban areas. If you go just outside all those urban areas, in those Asian Tiger Nations, it's like the growth never happened. So the challenge for those governments is to scale that growth and enable the rural population to also move up the economic ladder. And what's fundamental for that is having basic financial services, so bank account and then insurance account, if you're saving your money under the mattress you're really never going to work your way up out of poverty. So enabling a family to have a bank account and have basic insurance is really critical to making it happen. And what we're seeing in some of the really large Asian nations is they're looking at how can we use Cloud to absolutely scale this out to our entire rural population in terms of basic banking and basic financial services. And what's really interesting about that is we talk about companies, whether they be new institutions, or non-financial services companies who are born in the Cloud, and how lucky they are to have no legacy to deal with and are just more nimble and fast and on the capital cost of start, all kinds of things. And I think what we'll see in Asia in probably the next twelve to eighteen months, is we're going to see the first national financial services infrastructure born in the Cloud. It's going to be really interesting to see how that evolves, and I think what's going to happen is it's going to give that country a really significant competitive advantage over other countries.       

Jockle: So born in the Cloud and if I think about other industries, that have been born in Cloud, maybe not in traditional develop markets in banking, but more in the asset management field and as they scale their operations have been adopting or are more use to services provided in Cloud enablement. Are you seeing more readiness and adoption in some of those sectors at this point?

Opal: Yeah we are, and I think particularly when you talk about asset managers who actually manage the money. When you talk about big banks, you think about lots of infrastructure and almost like branch mentality you can't help but get complicated in there. Whereas if you're a hedge fund, you're very clean, you're goal is to take these dollars and make them more. If that's the way you're looking at your business, then Cloud is a natural place to go. In a lot of ways from a purely economic stand point you'd be crazy not to. And particularly when you talk about asset managers, and other funds, when you look at the compute power that Cloud enables, you'd almost be crazy not to, to be honest with you.

Jockle: So you know it's funny, I think back to an industry discussion I was at over the summer, and the CTO of a major bank was getting up and talking about lack of IT professionals in financial services. That you all in Seattle are stealing best of breed and going onto the most interesting projects, and that a lot of banks right now are faced with bringing in the resources in scale, or talent to empower the banking industry to really move forward. Are you finding in terms of adoption and breaking down those barriers to Cloud of being able to outsource some of this internal resource to companies like Microsoft, an emerging trend especially within the banking center.

Opal: Yeah in fact I would turn that around a little bit, and I would say, it depends on what kind of IT professional you're talking about. So if you're talking about an IT professional who is connecting the spaghetti, cleaning up that spaghetti and working on that massive spaghetti that sits behind the infrastructure of most banks, there's a lot of that need, but that's the old generation I think of technology professionals. I think the next technology professional is someone who is not focused on the spaghetti, but is focused on asking questions of the data and finding new patterns to find a business advantage. I think that's why Numerix is such an interesting firm to work with because you're really on the cutting edge of that, of using big math to figure out big data, and I think that's really the technology professional of the future. I think if I were a new graduate for example, that would be a much more appealing career path to me than this traditional spaghetti work if you will.   

Jockle: Well Mike I want to thank you so much and I appreciate the fact that Numerix, we're Cloud ready. So join the conversation, follow along, clearly Mike on LinkedIn as well as Microsoft and Azure and the developments they're bringing to the market. Mike I hope you come back again in a few months and sit down and it's rapidly evolving so the stories you bring from the field are of critical interest to the Numerix User, as they're moving, not only to centralization but to the Cloud as well. And join the conversation, we want to hear from you. Follow us on twitter @nxanalytics and on our blogs on numerix.com thank you very much. Thanks Mike.

Opal: Thank you.

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