The agility, cost savings and fast response times of public cloud services can afford financial enterprises huge business opportunities, says Stephen Schmidt, vice-president and chief information security officer of Amazon Web Services (AWS).
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Banking institutions in the Netherlands are reaping benefits of using AWS, Schmidt said.
Last year, the Netherlands banking regulator, De Nederlandsche Bank (DNB), approved the use of Amazon Web Services (AWS) in “all facets of Dutch financial operations” after firms sought clearance of the country’s banking regulator to take advantage of the benefits of cloud computing.
The approval of AWS cloud means Dutch banks can use Amazon’s public cloud services across websites, mobile applications, retail banking platforms, high-performance computing (HPC) and for credit risk analysis solutions.
But the Financial Conduct Authority in the UK has not yet provided any approval to the use of AWS cloud in the financial services sector. “We have had multiple talks with the financial regulatory authority and we are hopeful the UK regulator too will approve the use of public cloud across all facets of banking segment,” Schmidt said. “We are waiting to hear from them.”
“Financial services enterprises want agility,” Schmidt told Computer Weekly.
AWS makes it easy to quickly and cost-effectively process vast amounts of data as customers can set up multi-node Hadoop cluster on Amazon EC2 cloud service, he said.
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Launching a 10-node Hadoop cluster on AWS costs $0.15 per hour. Amazon EMR has tuned Hadoop for the cloud and it monitors users’ cluster – retrying failed tasks and automatically replacing poorly performing instances. “This provides huge sets of opportunities for the financial services sector," said Schmidt.
He added that AWS is currently focusing on improving the features of its public cloud services. “In the last one year alone we have launched 56 additional features and multiple instance types.”
“We will now continue to push the security aspects of AWS such as investing in providing additional user control features and cryptographic features to our customers," he said.
According to Schmidt, the perception that cloud is not secured is a myth. “The regulators are worried about the security on the cloud but we are demonstrating how some customers within the financial services sector are benefitting from it," he said.
In the US, NASDAQ, a financial services player, uses AWS public cloud services.
In an article on the FCA website, Clive Adamson, the director of Supervision at the Financial Conduct Authority referred to social media, cloud computing and big data as emerging disruptive technologies that are challenging.
“We are seeing emerging technology across the Cloud, next-generation data processing, big data, social media and mobile. These technologies, properly harnessed, could give real benefit to consumers but represent challenges to banks, not least because new entrants could emerge from non-traditional financial services firms,” Adamson said.
But some analysts think an approval from the FCA for the use of public cloud services across all facets of financial services IT may not be too far away.
“There is tremendous pressure on the FCA to approve use of public cloud in the banking and financial services sector. It is not a question of whether it will approve, it is more a question of when,” William Fellows, Research Vice President at 451 Group had told Computer Weekly on a separate occasion.
Meanwhile, at AWS’s London Summit 2014, Schmidt also spoke about how Cloud computing brings a culture of innovation. “Cloud offers enterprises the opportunity to experiment and public cloud’s cost model limits an organisation’s financial risk,” he said.