Is the Public Cloud Too Public for Forex?

Whether it’s JPMorgan’s customer data or Jennifer Lawrence’s nude photos, when hackers strike the rich and famous, everyone worries about their own privacy on the Web. 

Whether it’s JPMorgan’s customer data or Jennifer Lawrence’s nude photos, when hackers strike the rich and famous, everyone worries about their own privacy on the Web.

JP Morgan had vowed to spend a quarter of a billion dollars on cyber security. Yet, two months later, hackers were able to exploit vulnerabilities in the company’s Website and extract terabytes of information—including customer records, according to Bloomberg. By comparison, Lawrence’s images had been hacked from a public iCloud account costing her only a few dollars a year.

JPMorgan Chase & Co. and Jennifer Lawrence are at polar opposites in terms of their data storage needs, security requirements and budgets. Nonetheless, there is no question: financial institutions, as well as individuals, are moving “ever increasing volumes of data to the Cloud,” observes Heather McKenzie in Banking Technology. For the financial industry, “Cloud computing is an attractive option because it enables firms to bypass sizeable investments in infrastructure, hardware, software and maintenance typically associated with data storage.  The convenience and cost effectiveness of cloud computing have to be weighed against the security concerns,” writes McKenzie.

“Financial institutions would be foolhardy to rely on a public cloud such as iCloud or Amazon's AWS,” says Jubin Pejman, managing director of FCM360, developer of its own Low Latency Financial Cloud that provides clients with low latency colocation and hosting at the world’s key data centers—Equinix NY4 (New York), LD4 (London) and TY3 (Tokyo).

“While public clouds may be the largest providers of data storage, they are really only suitable for non-financial consumers. Their security is questionable and there is little technical support for FX brokers and traders,” Pejman points out. Conversely, FCM360’s Low Latency Financial Cloud eliminates the shortcomings of public cloud services. It is private, data isn’t commingled and it is set up specifically for the active management of FX market data, according to its creators.

Says Pejman, “We connect counterparties and aggregate data feeds from a range of vendors and remove the need to maintain multiple interfaces. We also obtain our clients’ requirements in advance—their counterparties and where they see themselves in three years in terms of scale and where they will be doing business in the future.”

FCM360 also owns all of its hardware and manages its own installations. “This should be a prerequisite for any managed services provider. But in the age of hosted services and cloud computing that is not always the case. What’s more, we are building our own hardware and services using a variety of open source software that allows us to create distributed storage models to compete with traditional storage such as enterprise SANs and other cloud-based storage services available on the Internet. We have also been developing our own management and monitoring tools using open-source as a framework. Since proximity is critical, we have connections to the large liquidity providers and data centers in the main locations – New York, Frankfurt, Tokyo and London as well.”

Those who are considering a move to the cloud need to be aware of the effort it takes to connect to multiple counterparties—particularly on the banking and liquidity side. Pejman says, “Even though the tools have become more powerful, the business process has not changed in 20 years, nor is it likely to in the future.”

Data shortage worries, combined with the interest in big data, are likely to fuel greater reliance on cloud services with vendors looking to accommodate the need with their offerings. FCM360, to be sure, is developing a cloud product that combines massive storage needed for big data with high-performance at an affordable price. “We are building a Ferrari that looks like a bus—really fast and agile and able to carry 100 passengers.”

A recent edition of e-Forex Magazine reported that, “FCM360 has looked at technologies like CEPH computing that promises file systems with Google-like ubiquity and access but with no reduction in performance, however, after closer examination, FCM360 concluded that the marketing was more powerful than the technology it was promoting.”

Notes Pejman, “Around four out of five IT projects fail the first time around and it is no different now with the cloud. While honest vendors will alert you to their limitations, it seems that there isn’t an IT company on earth that cannot do everything. But if you are paying $50 a month for a virtual private server, remember—ultimately you get what you pay for.”

photo credit: Strevo via photopin cc

FCM360 provides Low-Latency Trading Infrastructure for Automated Trading, Algorithmic Trading, High Frequency Trading as well as Managed Trading System Hosting and Exchange Connectivity. By utilizing FCM360 services, our clients are allowed to focus on their core business which is building client relationships, trade execution services and generating revenue. By having turn-key technology solutions for your trading clients you will enhance the recognition and value of your brand.