The quiet technology behind financial services innovation

 

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At this point, no one would deny that financial services innovation depends on technology. Quant-heavy trading strategies require systems that can crunch and parse unimaginable amounts of data.

Cryptocurrencies and blockchain have created entirely new asset classes that start and end in the digital world. With opportunities coming by the fractions of a second, trades have to happen faster than anyone could have anticipated even a year ago.


Today, information technology isn’t just necessary for financial services innovation. It’s a critical competitive advantage.


What’s often overlooked, though, is what makes all of this possible. Infrastructure is the secret power behind innovation in the financial services industry. Without flexible and secure cloud access and ripping fast connections, traders can’t even participate in the future of financial services. And yet the understandable focus on flashy new methods and markets has left infrastructure on the backburner — where a lack of attention can threaten the whole operation.

That fear drove our latest financial service client to seek out a managed hybrid cloud solution. When its IT team came to ServerCentral, they were still running in on weekends to deal with temperature fluctuations and underpowered servers. Keeping the infrastructure running took so much energy that improvements were more or less out of the question. With innovative financial services companies making technology innovation their No. 1 priority, it was time to level up.

“In the last year we’ve definitely ramped up, taking a more virtual stance, getting out of the hardware business. We just saw that weren’t going to be able to keep up. Working with ServerCentral is the biggest partnership we’ve done. It’s been fun, we do some very interesting things.”

— CTO for a major financial services company

Choosing ServerCentral as its Cloud and Infrastructure partner de-risked the team’s financial services technology, handing it over to professionals who focus on its health, availability and support full-time. Our expertise also gave the IT team a way to keep up with financial services innovation trends. We track those trends in real-time, so we can let them know the second there’s potential for a competitive advantage. Then we can use our bulk buying power to secure the latest tools at the right price, deploying them when and where they’re needed.

%

Monthly cost reduction from switching to managed infrastructure

times performance improvement with ServerCentral's infrastructure

Perhaps best of all though, ServerCentral was able to give the company’s own tech talent time to focus on the future of the financial services industry. With room to think about what’s possible and a partner to deliver it, this business can use infrastructure to transform, building a launchpad for entirely new ways to grow.

Using infrastructure to catalyze digital transformation and kickstart financial services’ future

The in-house team at this financial services company successfully built and ran the technology that drove such impressive growth. Embracing a new model of IT for financial services was a difficult decision — one that had to provide benefits so overwhelming they couldn’t be ignored.

For the CTO, it ultimately came down to building a foundation that would open up entirely new opportunities for the business. His team could keep the company performing, but to take advantage of emerging technologies in the financial services industry, he needed a partner who could provide the foundation, manage it and deliver on the potential to transform the business. Technology would become not just a tool, but a core part of the business strategy.

The timing was also right. The team’s infrastructure was reaching the end of its useful life, and a substantial financial services technology spend was looking inevitable. Switching to a managed hybrid cloud would give the company’s systems a needed upgrade and then some, while providing a complete transition to an OpEx model. We even broke that down further, helping them visualize their CloudEx — or cloud expense — so they can really understand the ROI a switch to cloud delivers.

Stepping into the managed cloud future of the financial services industry had another benefit — giving the team their weekends back. Instead of running in to replace a hard drive or fix a cooling issue, ServerCentral was able to de-risk the entire operation and take over management. That gave them time to focus on strategy.

Like true technologists, it took the team about a year of researching, testing and validating to hone their infrastructure strategy and find a partner they could trust in ServerCentral. “When we started, we were looking at multiple providers. In the end it came down to who was going to be the easiest to work with,” the CTO says. “We had great experiences with ServerCentral, and there were a lot less moving parts involved in the transition to managed cloud. We didn’t have to work with carriers, I didn’t need a new circuit. That allowed us to work together on pulling this off with minimal impact.”

Then it was our job to do exactly that.

Embracing financial services innovation without disrupting operations

There’s no room for error when you’re talking billions of dollars — traders need the infrastructure to work 24x7x365 so they can do their jobs. There are very real consequences if it fails.

“At the end of the day, if traders can’t trade, it doesn’t matter if email is working .”

— CTO for a major financial services company

“Overall, the entire transition went off really well,” the CTO says. We architected the infrastructure so the same will be said of future transitions — planned or unplanned. Moving to ServerCentral upgraded the financial services technology from a 1 gigabyte backbone to a 10 gigabyte backbone, allowing the company to switch seamlessly between its onsite infrastructure and ServerCentral’s. That means disaster recovery tests are a thing of the past. Now the IT team can test its DR environment in real-time with real data by simply switching the system over. The business can remain fully operational throughout.

Selling traders on the benefits of financial innovation

If there’s one thing financial professionals understand, it’s risk. The transition to ServerCentral de-risked their infrastructure, giving them a much more reliable foundation on which to run the business. We also de-risked DR and set the company up to write an entirely new business continuity plan with much less concern about infrastructure outages. “Now a loss doesn’t mean a functional outage,” the CTO says. “It’s just a temporary capacity issue.”

ServerCentral also took care to maximize the infrastructure architecture for security. “Every time you say ‘cloud’ in the financial services industry, people think you’re talking about Amazon, Google, Azure, and they automatically bring up valid security concerns about who has access to our data,” the CTO says. “This is managed infrastructure designed with security in mind.”

The cost savings — over 45 percent per month — plus the opportunity to avoid a major CapEx outlay, also appealed to the financial service company’s executive team. The new infrastructure gives them a much better understanding of their technology spend, and the IT team is already meeting with leaders across the company to show them how to balance needs against infrastructure costs.

“Internally, I can start wrapping costs around how the business wants the technology to work,” the CTO says. “I can justify my budget and show them exactly what each request will cost to acquire and to maintain.” 

While not everyone understands the value of a 10x increase in capacity, they do understand the value in being faster than competitors. Even a slight edge in timing translates to huge amounts of money, one of the financial services innovations everyone can respect.

The real transformation, though, comes in the options. “We’re able to leverage solution licensing models that ServerCentral brings to the table, which we would never have been able to get,” the CTO says.

Now, if a business leader comes to IT demanding a massive amount of compute power, the team can tap ServerCentral’s connection with AWS to securely burst into the public cloud, spinning up resources that would never have been possible before. “The datasets quantitative strategies work with are insane,” the CTO says. “If we get into a crunch, I know we can expand very fast, because those resources are all on net via ServerCentral’s connection to AWS.”

Buying into a faster, better future for financial services

“When we started this, we sold it as the beginning,” the CTO says. Already, the transition to ServerCentral is opening up opportunities his team couldn’t have foreseen. “A lot of what we’ve done is simply the way we’ve always done things. That fell by the wayside as we started moving off equipment we’ve had for a decade. Nimble servers, faster hypervisors, now we’re talking about a-to-b site usage and looking at a VDI solution and ways to replicate technology.” The options have exploded.

Feel a bit like it went from biz to technical quickly.

I’m totally fine cutting this paragraph, or slimming it way back. I wanted the technical details because we had them, but I agree that it feels like it’s for a different audience.

I think we need an intro on this instead of removing it. Something that transitions from business to tech, then this tech section, then back out. This is really valuable and I’d had to see it removed.

times ServerCentral was able to take this financial services company from a 1 gig backbone to a 10 gig backbone, radically rewriting what's possible

And that’s necessary, because technology trends have been speeding along for everyone else, too. Cryptocurrencies and blockchain in particular have inspired plenty of financial services companies to adopt the cloud and upgrade their infrastructure to IaaS. Without secure cloud resources in place, traders are forced to sit on the sidelines, missing the opportunity all together. That’s bringing an urgency to infrastructure that wasn’t present even six months ago.

The financial services sector is global, competitive and hyperdynamic. ServerCentral’s IaaS was a strategic, business-driven move that puts this company in the best possible position for helping its clients take advantage of new opportunities as they arise.

“I told the team, ‘This isn’t the end. This is where we are starting. This is where we’re going.’”

— CTO for a major financial services company

For financial services, infrastructure is now the ticket into the game.

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