The Future of Markets is the Cloud CS349F: Technology for Financial Systems October 12, 2020
TECHNOLOGY TRENDS SHAPING FINANCIAL SERVICES Innovations Advancing The Landscape CLOUD SERVICES STREAMING / DATA LAKES BLOCKCHAIN INTERNET OF THINGS CRYPTOGRAPHY INTELLIGENT / PERSONAL AI / QUANTUM VIRTUAL ASSISTANT MACHINE LEARNING COMPUTING EDGE / DIGITAL APIs / AUGMENTED REALITY / FOG COMPUTING MONEY MICROSERVICES VIRTUAL REALITY 2 . Confidential – Do not Distribute
Agenda Born of Innovation • Nasdaq’s Cloud Vision • Why Cloud • COVID-19 has accelerated trends • The challenges & opportunities • The road ahead • 3 Confidential – Do not Distribute
A Brief History of Nasdaq
Nasdaq’s Cloud Vision Multi-Cloud architecture and deployment. All new initiatives and major reinvestments will leverage a multi cloud approach, built natively for cloud, utilizing the Nasdaq Financial Framework. Every exchange system, for the most part, is on-premise, sits in a data center, and becomes a very bespoke offering by each exchange. And then you have an ecosystem that sits within the data center as well. If you lift that into the cloud, then you have an opportunity to look at it on a more broad basis in terms of it being a platform for transactions that occur across the world. - Adena Friedman – President and CEO, Nasdaq “The time has come to concentrate on building the critical market infrastructure in the cloud.” -- Brad Peterson and Lars Ottersgård,Nasdaq 4 Confidential – Do not Distribute
Key Benefits Convert Scalability and Increase Speed Customer Innovation CapEx to OpEx Elasticity and Agility Focus Acceleration • No more guessing • Capacity can be • Compute resources • Stay ahead of client • Take advantage of new scaled up or down can be provisioned buying preferences innovations in the • Pay only when you based on need much faster cloud (AI, ML, security, consume • Focus on work that resiliency etc.) • Global Footprint • Faster release cycle & differentiate business • No planning for reduced time to functions, not the • Facilitates faster “peak” system loads market infrastructure. innovation loops and progress • Our SaaS solution will • Expansion into non- enable faster delivery financial Markets • Our customers expect to external customers our leadership in the technology adoption. 6 Confidential – Do not Distribute
Moving Financial Trading to the Cloud: Opportunities Transform the way in which products and services are developed and delivered Derive insights using advanced analytics and AI/ML Unlock the ability to leverage Nasdaq technology outside of the traditional customer base Transform the way participants interact with data using modern APIs Business Capabilities Unfettered access to markets and data with PaaS and SaaS On-Prem Services offerings at scale Cloud Services Greater flexibility via on-demand infrastructure and decreased time to market Data Lake AI / ML Provide a rich portfolio of mission critical business applications 5 . Confidential – Do not Distribute
Accelerating Distributed Networks Shifted focus to the edge of the § network . . Rise in cloud and SaaS based § connectivity New targets for exploit § 8 Confidential – Do not Distribute
The Shift to Working From Home The shift to WFH required a change in strategy of investments that were planned for major business campuses to residential/suburban regions: Infrastructure Capacity Security concerns have shifted to the home Greater use of automated/online service even for basics such as groceries Online learning for children Remote onboarding of interns and employees 9 Confidential – Do not Distribute
COVID, Cloud and Financial Services Our environment has a mix of environment, • Market volatility is something we plan in on premise, private cloud, public cloud. The our daily cadence. We are continually benefit we’ve seen just as many others in testing our systems for resiliency and the industry is the ability to have public and performance almost every weekend to private cloud flexibility without having staff ensure everything is ready as market opens go into the datacenters to install hardware. on Monday. It’s a process that we’ve memorialized into everything we do. Our contribution comes from ensuring that Collaboration across geographies and with our market participants can have the our customers has been aided by the use of confidence that regardless of the external various technologies such as Team and factors, we’ve put in place very strong Zoom. It highlights the importance of these practices and policies to ensure that our services also having the capacity to scale as technology will work as it’s supposed to. more than 80% of the workforce globally moved to WFH and still stay connected. 7 Confidential – Do not Distribute
Shared Resources 01 02 03 04 Determinism Latency Throughput Fairness 13 . Confidential – Do not Distribute
All About Time… Confidential – Do not Distribute
Using Time to Address challenges Use Time to ascertain fair Minimize Jitter in the system High Resolution Time access q Guarantee ordered q Distributed Clocks providing q In public cloud, use Time as processing of transactions ability to synchronize nodes a means to guarantee based on entry time in cloud based deployment fairness, transparency and q Deliver a platform which q Inter and Intra Datacenter compliance provides deterministic support q Access to Order Ports behavior q Synchronization within and/or Matching Engine single digit nanoseconds and Market Data 15 . Confidential – Do not Distribute
Addressing Technical Challenges: Performance and Determinism Performance Optimized Node Kernel By-pass Solutions q Interrupt Steering q Access to low-level controls on q Workload Isolation Network Cards q Bare-metal Instances q Accelerated Path to Applications q Processor Selection Multicast Support in Public Cloud Workload Placement q Support scale-out deployments q Isolate nodes when latency q Latency sensitive sensitive workloads are running q Co-locate customer workloads in proximity q Methods to minimize workload sprawl 14 . Confidential – Do not Distribute
Mo Moving Financial Tra rading to to th the Cl Cloud: N Non-Te Technic ical al Ch Challenge ges q Cost management and Containment q Governance/Compliance q Ecosystem Possibility of drawing • • Changes to co-location • Increased effort for IT to unexpected cloud costs provide governance, risks business/ revenue model as a result of spinning up q Security and data quality as a result of migrating q Education multiple cloud • Confidentiality of user data management requires. our markets to cloud. • As cloud computing environments. can still be at stake due to • Compliance with industry remains a fairly new Difficult to define and • the various types of attacks standards. (regSCI, concept, it’s often difficult (man-in-the-middle, forecast quantities and auditability). for stakeholders to costs. shoulder surfing, phishing, understand the benefits, and insider attacks). challenges or functionality of cloud computing. 1 Confidential – Do not Distribute 5
Addres Ad essing N g Non on-Te Technical Ch Challenge ges q Cost management and q Governance/Compliance Containment q Ecosystem Build a well-understood • Predictive analysis of • • Well-understood compliance framework. q Security projected costs. Holistic migration plan with view of resource continuous customer • Have a comprehensive q Education demands and granular engagement. security posture financial reporting. incorporating the shared • Comprehensive stakeholder engagement responsibility model with continuous governance and and education program compliance checks. such as CCOE. 1 Confidential – Do not Distribute 6
Transitioning to the Cloud Establishing a Migration Plan to Mitigate Risk and Client Impact Timelines and Progression are informed by Clients, Cloud Capabilities, and Previous Transitions Migration Path Established •Deployment of Internal Environments to the Cloud •Minimize Risk •Robust Performance Testing • Controlled & Informed • Risk Assessment completed •Regulatory & Information Migrations •Migration Path minimizing client Security Controls instantiated • Client Partnership in Migration and market impact established • Feedback Loop informs •Client Feedback informing continued path forward timing, speed, and target state Technical Market to Cloud Capabilities Proven 17 Confidential – Do not Distribute
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