20 Jun
2016

FinTech Companies Are Putting Their Money on Amazon Web Services

The cloud is coming to finance. Many banks have already tapped cloud solutions such as Amazon Web Services (AWS) to run test environments but have not made this information public. Now, FinTech companies like J.P. Morgan Chase and Capital One are openly discussing their plans to use AWS for handling high-volume days, such as Black Friday, or spinning up new servers.

And that is just the beginning. Here is a closer look at how FinTech firms are banking on the Amazon cloud to bolster their bottom line.

 

Making the Move

Researchers at Deutsche Bank claim the use of cloud services will ramp up over the next 12 months, but some companies are ahead of the curve. For example, Goldman Sachs has been working with the cloud for six years and 85 percent of its workloads now run in the cloud, reports Network World. The company also has invested big in container technology to help package both applications and components. Bottom line? Goldman Sachs isn’t just making idle conversation, it is committed to the cloud.

 

Core Competency

Many FinTech companies consider the cloud an ideal testing environment because anything that is “broken” can simply be reset and tried again — there’s no real risk to critical assets. According to Tech Week Europe, there is another new trend on the horizon: moving core systems to cloud platforms. Entrepreneur bank OakNorth, which provides loans to startups and fast-growth companies, took the plunge with AWS to become the first U.K. bank running all critical infrastructure in the cloud. Beyond cost savings, OakNorth’s core systems now benefit from on-demand scalability, flexibility and agility. 

Moving to the cloud also offers security advantages, such as leveraging native AWS protection and cloud-based encryption apps like Cirius 365. With seamless Office and Outlook integration, secure large file transfer and support for regulatory compliance, the combination of purpose-built security apps and the AWS foundation puts financial companies ahead of the security curve.

 

Fast Finance

Cloud computing also brings about the case for increased speed. Consider the experience of the Spanish institution Bankinter, one of the country’s top-ten banks and a leading industrial lender. To evaluate the current and prospective financial health of its clients, the company runs highly complex credit-risk simulations. These require at least five million individual simulations to create realistic outcomes that inform C-suite decision making.

Prior to using AWS, running the credit simulations took 23 hours. Now, by leveraging the Elastic Compute Cloud (EC2), the time-to-solution is just 20 minutes. Better still? According to an Amazon case study, costs were dramatically reduced and the company was able to shift from batch processing to a parallel processing structure.

AWS has been courting big bank business for years. While many have used Amazon’s offering as the basis of testing environments, a maturing cloud marketplace has shifted the paradigm. Large-scale moves, core infrastructure shifts and increased speed are hallmarks of the new cloud continuum.

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