DTCC to evaluate opportunities to strategically expand the use of the cloud more broadly across its external services and applications
A new white paper from The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, suggests that cloud computing has reached a tipping point, with capabilities and cost efficiencies exceeding those achieved via in-house data centers.
In the paper, “Moving Financial Market Infrastructure to the Cloud,” DTCC asserts that the capabilities, resiliency and security of services provided by cloud vendors has surpassed on- premise capabilities. As a result, DTCC will evaluate opportunities to strategically expand the use of the cloud more broadly across its external services and applications where it makes sense, with a goal of leveraging cloud capabilities to reduce risk and cost and improve the resiliency and security of DTCC’s systems. DTCC recognizes that understanding and market acceptance of significant technology changes require industry-wide communication and open discussion. The white paper provides DTCC’s views on the benefits of the public cloud platform and discusses the relevant regulatory guidance and requirements to utilize cloud vendors and the related policy implications.
Historically, many market infrastructures built, maintained and housed technology in proprietary data centers. Today, the cost and value of cloud computing technologies is challenging long-standing justifications for provisioning and/or sustaining individually owned and managed data centers. In fact, the white paper highlights that cloud operations have become so robust and sophisticated that many of the biggest companies cannot achieve the scale of some of the large cloud vendors with respect to performance, security, cost and scale.
“DTCC has been leveraging cloud services for almost five years and believes the cloud represents a viable alternative to corporate data centers,” said Robert Garrison, DTCC CIO. “We believe cloud computing has moved past a tipping point and that the security, scalability, resiliency, recoverability and cost of applications in the cloud are better than many private enterprises could achieve on their own. As a result, we will pursue a strategy of building a cloud ecosystem that supports best practices and standards. At the same time, we take seriously our responsibility to be in full compliance with all relevant regulatory requirements and pledge to work in collaboration with our supervisors to achieve this. Due to the critical nature of the services provided by DTCC, we will execute our cloud strategy in collaboration with key stakeholders, including clients and supervisors.”
DTCC notes, however, that moving applications that were originally developed within a corporate data center to the cloud, a model known as “lift and shift,” will not immediately deliver benefits. In fact, it is possible that migrating to the cloud could introduce additional complexity. Therefore, cloud strategies must carefully examine each application to ensure that the intended benefits are achievable.
Regulatory Considerations
A decade-long maturing of cloud services, along with the active engagement of many regulatory and security experts have produced an abundance of guidance for cloud implementations including best practices.
“Regulators globally have acknowledged the appropriateness of leveraging cloud vendors as long as mandates and compliance obligations are met,” said Mark Wetjen, DTCC Head of Global Public Policy. “DTCC will work in collaboration with its supervisors to ensure that we balance innovation with our core mission of providing safety and soundness to the financial services industry.”
