Inside Reference Data recently held a webinar on Tuesday 2nd October discussing the hot topic of hosting Reference Data in the cloud. I represented Excelian as a panelist alongside senior representatives from banking and the vendors to discuss the impact cloud computing is having on the management and provisioning of Reference Data.

Naturally there was a significant amount of interest and questions were focused around some of the typical concerns of using public cloud offerings such as security, control, scalability and vendor lock-in. These concerns are equally applicable to any use of public cloud by conservative industries such as the financial sector. The panel was in general agreement that security is a key concern and more needs to be done by the providers to ensure that this continues to be addressed.

When looking at some of the benefits of cloud, again there was a general consensus that it offers scalability, flexibility and ultimately cost reduction but the loss of control and ownership needs consideration. SLAs, business continuity and physical locations are key questions to be answered.

But more specifically, why would you want to store Reference Data in the cloud? And what types of data are best suited to being held there?

To answer the first question you need to take a look at how the cloud is starting to be used for the ever increasing demands of high performance computation, especially around risk calculations. As more is done in the cloud, there is the ever increasing need to get your associated data co-located. This ensures all the data is where you need it and reduces the latency inherent in round trips back to your centralised Reference Data solution. The utopian solution would be for data vendors to provide the data directly in to the cloud with a management layer over the top. Organisations can then overlay their own specific data without anything ever touching their infrastructure. Cost reductions, correct co-location and improved performance for the increasing complexity of risk calculations required to meet regulatory needs.

As to the types of Reference Data which can be held in the cloud, there are no hard and fast rules. Anything can be held there but it may make more sense to hold non-sensitive data which is less likely to change frequently. During the discussions it became apparent that the whole breadth of data from pricing to instrument to corporate action information is being stored and managed with cloud solutions.

Will we see a reduction in data costs from vendors if data is supplied directly to the cloud? I think the potential is there but it may require a mind-shift for both financial organisations and the suppliers of the data. If a shared, leased cloud solution being accessed by a number of organisations became a reality then logically there could be cost savings realised. I suspect time will tell on this one. If the demand is there, the vendors are more likely to respond.

The benefit of cloud solutions for helping to meet the ever increasing number and complexity of financial regulatory requirements was one question where opinion was divided. Whilst much of the feeling was that this was a benefit, I cautioned against the implications of some regulatory bodies around the physical location and segregation of data. Singapore and Germany amongst others has some strict regulations around the physical location of data.

The whole panel agreed, however, that it is an exciting time to be in the world of Reference Data and the drive towards the cloud would ultimately provide alternatives, beneficial or not, to the current offerings. The increase in options for organisations can only be a positive thing.

From a personal perspective, it was a great experience to be involved in what is seen as 'leading edge' within the Reference Data world.
Ian King