Firstly, a sincere wish for safety and wellbeing of all, my deepest sympathies for those who fought valiantly and prayers for those who continue to fight. As our communities fight for lives and livelihood, we as business leaders shoulder the responsibility to help our organizations and the world arise strong and resurgent.
Magic FinServ is one such company where we could, overnight, move our operations into a remote working model, with all the security and confidentiality norms intact. This was only possible because we are a cloud-first company, effectively running our business on the cloud while supporting numerous clients across geographies. Amidst efforts to minimize disruptions to our daily business operations, we were also highly cognizant of the increased security vulnerabilities arising out of this paradigm shift. We made some hard and expensive choices to keep our global teams functioning well during severe lockdowns. We improvised and made possible actions that we would have never dreamt of and we will continue to make difficult choices in the months to come. There is no “Going Back to Work” as we know it today as several aspects that we took for granted will no longer be required while repeated lockdowns and disruptions will become the norm.
The Rising popularity of Cloud
As per a survey conducted by Forbes, in early 2020, as many as 50% of Financial Services leaders had placed Cloud BI as their top priority this year. And in a post-COVID world, the cloud is definitely going to be the center of all technology. Cloud, thus moved quickly from being an IT cost-center of a hedge-fund to an essential component for running a nimble, agile, and highly scalable organization that operates on a fully variable cost model, and most importantly securely accessible to all stakeholders. Smart managers will seize this opportunity to design a whole new organization from a brand new set of principles as virtual is now our new reality.
Cloud for Hedge Funds
As the situation around COVID19 having unprecedented business implications arose, a key question also emerged that begs an answer: Why are only some companies thriving and handling this disruption well? From a technical viewpoint, the companies that are handling it well are either the SaaS companies or those that have set themselves up predominantly operating on the cloud.
For hedge funds, asset managers, and other capital market entities, the cloud has capabilities to support front, middle and back-office functions. This includes everything ranging from business applications and client relationship management systems to data management solutions and accounting systems. Cloud emerged as a path of choice but its considerations for capital markets are different than ones applicable for other businesses, owing to industry regulations, complex reporting, the sensitivity of data, and compliance requisites of the industry.
As a provider of Digital Technology (AI / ML / Blockchain / Cloud) Services, Magic FinServ has a unique proposition that makes deploying and maintaining a capital markets cloud initiative time-bound, cost-effective, and highly secure. Our deep understanding of the vertical enables us to be a strategic partner as our customers design their organization to take on the new challenges and opportunities.
Getting Started With Cloud: Time for a Health Check
A highly recommended first step towards the cloud, for any hedge fund or asset manager, would be a comprehensive assessment of your organization for cloud readiness and maturity. The assessment of your IT infrastructure and operations for business continuity, reliability, scalability, accessibility, while maintaining the same levels of security and confidentiality as physically secure operations centers, is rather imperative so you can plan and weather the disruptions to emerge stronger and leaner. Well begun is half done stands true for cloud as well.
At Magic FinServ, we developed a 128 point assessment offering that measures your organization on these critical aspects. We understand the operational, security, and confidentiality demands of the buy-side industry and we assess your ability to meet these exacting demands. Increasingly, your customers, investors, and other counterparties will also assess you on these parameters, so a comprehensive assessment study will help you respond to these queries with confidence.
The assessment need not be a time consuming, expensive affair since we have customized and optimized our assessment for the buy side-industry. A typical small to midsize operation would need about 2-3 months. It is a relatively small time investment that will identify the gaps and make recommendations to bridge these gaps so that your onward cloud journey is smooth, in-line with your business objectives and saves you from expensive mistakes later.
Migration and Deployment to Cloud
According to ValueWalk, almost 90% of hedge funds will move to the cloud, in the next 5 years. Migration / Deployment to cloud was often seen as an IT cost initiative earlier, however, as firms move from a CapEx to an OpEx preference, it is now increasingly becoming a key element of a whole new way of operations.
Most organizations in the financial services industry take a phased approach of moving to the cloud, with multi-year plans. They start with setting the framework and testing the waters with an initial few applications, usually business applications like Email, File Sharing, OMS, Risk, and CRM, moving them to a hosted model. The benefits of adopting this hosted model include gaining a highly available infrastructure of the cloud providers. This is typically followed by migrating data to the cloud and finally moving the bulk of the workload in a lift and shift mode.
Somewhere in this journey, security is addressed. What is often missing in this journey is the aspect of transformation, especially when there is the burden of legacy, monolithic applications that are in dire need of modernization and transformation. The proper planned and orchestrated migration to cloud is an ideal opportunity to address this long pending initiative.
Magic FinServ, with its focus on capital markets vertical, has developed an Integrated, Incremental, and Scalable method of incorporating cloud into the customer’s ecosystem. An integrated approach to Applications, Infrastructure, and Security helps us come up with a robust and holistic plan. The approach uses as many native services of the cloud provider as possible making it easily adaptable to the cloud environment, bringing in cost efficiencies. A segmented and incremental approach to Applications (Microservices), Infrastructure and Security (DevSecOps, Micro-Segmentation) results in moving incremental and prioritized workloads to the cloud, helping utilize multiple cloud environments thereby leveraging the best of all the providers and something that is integrated well into the hedge fund’s specific environment. Implementing the Infrastructure-as-code helps in making the cloud environment extremely manageable, scalable, simplified, and secured.
This systemized incremental approach has helped entities to achieve rapid time to market and highly optimized cost of deployment while bringing incremental benefits very early in the deployment life cycle. Our objective remains to make this transition as much self-funded and sustainable as possible thereby delivering a high ROI.
Managing the Cloud Environment Effectively
The Cloud is democratizing the consumption of IT Services and driving innovation. However if not governed effectively, this sudden freedom and access could spiral your cloud’s running and managing costs, while making it susceptible to security risk. The democratization has been made possible by public cloud providers making available out of the box capabilities, or native cloud capabilities. However, these additional capabilities come at the cost of additional spend as well as some loss of flexibility. Optimal management of such capabilities is necessary to maintain a balance between time to market on one hand and cost, flexibility, and security on the other.
Magic FinServ has developed an integrated operations and IT monitoring support capability to provide customers with a SaaS type model, enabling the smooth and uninterrupted running of business operations incorporated in the architecture itself. Automated release and deployment, coupled with automated infrastructure testing help make change and configuration management easy and fast. Since uptime is crucial to operational efficiency and profitability, the high-touch support model across L1, L2, L3, ensures quick resolution of any issues and congruence across functions.
Handling Enterprise Data
A key element of the buy-side industry is the management of enterprise data. This not only impacts upfront costs but also could potentially impact business outcomes. Magic FinServ, as a member of the EDMCouncil, ensures that an enterprise data architect is a part of our cloud center of excellence, as a best practice. We have been supporting enterprise data initiatives for several buy-side organizations over the years and hence are abreast of the inconsistencies that may be caused by customizing underlying data models to suit specific organization needs. Our industry-driven high touch support services help in managing these inconsistencies, especially as we help move data to the cloud or the constant upstream and downstream in hybrid cloud systems.
Conclusion
As Asset Managers and Hedge Funds make this move to the cloud in a new paradigm, they should ideally make the move with trusted and industry-oriented managed service providers, since this is a tectonic shift in their operating model. Ultimately the move to the cloud is not just a technology choice, it’s a business decision.