Part 1: What the Infrastructure Needs to do
Trades and Products
Where do Trades Come From?
The Purpose of the Infrastructure
Part 2: The Problems with Trade Processing Infrastructure
The Evolution of Technical Complexity
The Regulatory Challenges
The Complexity Cycle
Part 3: Historic Approaches to Transformation
Functionalisation, aka “Factories”
The Golden Middle
Part 4: New Approaches to Infrastructure
Cloud and Utilities
Artificial Intelligence and Robotics
Big Data and Analytics
Blockchain/Distributed Ledger Technology
Distributed Ledger Technology: Hybrid Approach
Business user: So we then capture the data and store it in the cloud?
IT manager: No, we store the data in the system’s database.
Business user: Which is in the cloud?
IT manager: No, it is in our server centre.
Business user: The credit derivatives system feeds data into our cloud as well?
IT manager (shaking head): Oh, never mind …
– A real-life conversation at a bank about “the cloud”
Cannot transform your infrastructure? Why not let someone else run it? In capital markets, there are a wide variety of options available to outsource hardware, utility software and/or core trade processing software. Outsourcing the infrastructure is in no way a new concept in capital markets, but two words have captured the imagination of many business and IT leaders in the industry: “cloud” and “utility”. Both represent very real solutions, but both have become shrouded in hype and confusion. This chapter will bring some clarity to the range of ideas that are covered by the terms “cloud” and “utility”, and set out the questions that need to be asked to determine how suitable they are for any given firm or situation.
For much of the history of computing between the 1940s and