Bullish has signed a multi-year deal with Adaptive to replace its incumbent messaging vendor technology with Adaptive’s Aeron Premium, and to receive support and professional services.

Adaptive’s Aeron Premium is an enterprise-grade product which complements the Aeron open-source technology, providing additional software components for performance, security, and resilience.

As a cloud-native exchange built on Google Cloud’s scalable infrastructure, Bullish was able to source Adaptive’s Aeron Premium services directly through Google Cloud Marketplace. 

“As a cloud-native exchange, we believe that the future of finance is firmly rooted in the cloud. Bullish was already using Adaptive’s FIX engine and we also have strong ties with Google Cloud,” said Alan Fraser, head of platform infrastructure at Bullish.

“[…] Leveraging Adaptive’s support services provided us with invaluable expertise and assurance, significantly mitigating the risk associated with upgrading to a more scalable architecture.” 

According to a recent AWS whitepaper from January, key advantages of moving financial market infrastructure to the cloud include lower barriers to launching new markets globally, thanks to increased standardisation and harmonisation. Other benefits include the ability to operate 24/7, access to cutting-edge technology, cost savings, and improved operational efficiency.

Despite these benefits, legacy systems were built in a different time, and operations are steeped in historical processes and data. This therefore requires large amounts of investment and attention to allow market players to execute their goals. 

Read more: As cloud adoption across the market continues to rise, is the shift of liquidity itself next to follow?

Since implementing Aeron Premium, the Bullish exchange has achieved a number of business benefits including improved throughput and capacity, high availability of Bullish’s 24/7 exchange operations, and added security.

“Aeron technology is specifically designed to handle very large data volumes with minimal latency, ensuring 24/7 high availability, not only in traditional on-premises environments but more importantly on the public cloud, providing a robust backbone for Bullish’s 24/7 trading operations,” said Matt Barrett, chief executive and co-founder of Adaptive.

In the future, Bullish aims to utilise further Aeron Premium components for clustering and resilience to create a more flexible and maintainable infrastructure, enabling the exchange to perform hot upgrades in a 24/7 market, significantly reducing maintenance challenges. 

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Terry Duffy

The plan is to build a new private Google Cloud region to support CME Group’s global trading, offering derivatives traders access to “cloud-based, ultra-low-latency networking and high-performance computing”.

According to the businesses the specialised platform for capital markets is an industry first, with development already underway beginning with customer testing in the Dallas Google Cloud region. Ultimately, this will become the disaster recovery facility for the Illinois offering. 

Construction is slated for later this year, with CME Group having already confirmed to its clients that an 18-month notice will be provided prior to the exchange moving its markets to the new platform.

Speaking to The TRADE earlier this year, Rohit Bhat, Google Cloud’s managing director for capital markets, exchanges, and digital assets, explained that one of Google’s key focus points was around these deeper collaborations with institutions that represent the value chain of capital markets, with the final aim of playing a part in the future development of the industry.

“There’s a real opportunity to move the needle on how these markets will evolve over the next decade or even next two decades […] Our approach is truly around collaborating directly with the players that can make a difference in this particular space of financial services. 
 
“[…] We’re here not for the value that’s going to come in 2024 only. Our investments are thoughtful enough to go farther out to multi decade.”

Read more: As cloud adoption across the market continues to rise, is the shift of liquidity itself next to follow?

The Chicago location is set to allow CME Group’s clients to utilise existing connectivity options for other global markets.

Clients can decide whether to opt for self-managed infrastructure in the co-location facility or Google Cloud’s specialised infrastructure-as-a-service offering. Both have equal network latency to the exchange.

Users are set to benefit from expanded flexibility, strengthened operational efficiencies, and increased access to cloud services, and artificial intelligence (AI) capabilities.

Terry Duffy, CME Group chair and chief executive, said: “Google Cloud’s new specialised platform will extend the benefits we can provide to our clients through next-generation cloud technology, expanded access and efficiencies, a broader range of customised connectivity options, and faster product development, with minimal disruption to their current operations.”

CME Group and Google Cloud have been in partnership since 2021, with recent work having been made to enhance CME Group’s cloud-based data platform and migration of critical clearing applications to the cloud.

The businesses struck a 10-year deal in November 2021 to partner and move the exchange’s trading systems to the cloud (with Google at the same time, separately, investing a billion dollars in the business).

“Our latest milestone with CME Group builds on our shared goal to accelerate CME’s move to the cloud and innovate capital markets infrastructure worldwide,” asserted Thomas Kurian, chief executive of Google Cloud.

“Through our collaboration, we’re harnessing the best of cloud computing, data analytics, and AI, while respecting the existing custom hardware requirements of market participants to bring low latency, deterministic, and scalable trading environments to CME Group customers and the broader financial markets.”

Recent times have seen a swathe of investments from major cloud providers into leading exchanges. Over the last three to four years significant investments have been made, and long-term partnerships forged across the market.

In 2020, the Singapore Exchange (SGX) completed a proof of concept with Amazon to build a cloud-native exchange, whilst Deutsche Bank signed an innovation partnership with Google Cloud the same year. Following this, in November 2021, Amazon (AWS) and Nasdaq signed a multi-year agreement aimed at jointly fostering a new cloud-based market infrastructure and migrating every exchange to the cloud by 2028.

More recently, Microsoft and the London Stock Exchange launched a 10-year strategic partnership back in December 2022 also focused on developing cloud infrastructure solutions, whilst in February last year, Google Cloud officially became Deutsche Börse Groups’ preferred cloud partner for the next decade.

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Specifically, TD is set to enhance and further innovate banking experiences for clients through adding Google Cloud services to its portfolio of technology solutions.

The move follows a previous collaboration between the parties which saw TD Securities’ Chicago-based subsidiary TD Securities Automated Trading (TSAT) use Google Cloud’s Kubernetes Engine (GKE) capabilities in a bid to keep up with market developments.

Dan Bosman, senior vice president and chief information officer at TD Securities and treasury and balance sheet management (TBSM), explained: “Google Cloud’s features are very well-suited to our business and provide a secure and scalable infrastructure that can support compute-intensive quantitative analysis, with an elevated developer experience.

“Google Cloud’s capabilities have helped us grow TDSAT’s trading volumes and portfolio size, and optimally serve our global clients. Additionally, the Google Cloud team has been truly collaborative, providing the resources we needed to help our technology integration process be as seamless as possible.”

Read more: Fireside Friday with… Google’s Rohit Bhat

The partnership will also allow TD to benefit from Google Cloud’s engineering support, including access to Google’s global network of engineers in order to optimise product use in a highly regulated environment.

Matt Renner, president, global field organisation, for Google Cloud, said: “Our multi-year strategic relationship with TD will leverage the power of Google Cloud’s secure cloud infrastructure and world class engineering talent with the goal of driving new levels of agility, customer-centricity, and engineering innovation to more easily adapt and respond to the changing needs of TD customers.”

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This year the market will see more generative AI use-cases go from pilots to production. Throughout 2023, we saw generative AI experimentation across the capital markets ecosystem. Experimenting with gen AI will continue in 2024, but we’ll see an increase of pilots go into production focused on creating differentiated client experiences, automating content curation, and increasing productivity. 

Gen AI can improve speed and quality of research, support coding for developers, and ultimately help to accelerate alpha generation by creating, testing, and deploying strategies dependent on high precision knowledge discovery and recall. Firms will need a leader in the space, like Google, that can supply both first party multi-modal AI solutions, like Gemini, and a cloud provider that is open enough to support third party models that meet varying requirements.

How are industry players adapting to AI developments?

Capital markets firms will have to work harder to meet new AI talent demands. There’s a skills gap in the financial market for new roles like AI quality assurance testers, prompt engineers, AI strategy consultants, and AI product managers.

Going forward, capital markets firms will need to look to technology providers to help bridge the gap by providing training to upskill their workforce while introducing solutions that increase productivity and efficiencies across the employee base.

What is the current trajectory for technological enhancements in the digital assets space?

Looking ahead, maturity in digital assets is set to happen on three important fronts. Moving from two-day (T+2) to one-day (T+1) or even same-day (T0) security settlement for financial institutions will demand the modernisation of core and collateral systems. Technologies like blockchain and cloud can help financial institutions speed up settlement cycles, leading to a faster, more efficient financial ecosystem.

Financial enterprises must look to establish digital currency payment rails that will allow faster settlements, lower counterparty risk, and 24/7 availability.

As the regulatory landscape evolves, digital asset and crypto exchanges will make renewed investments in compliant and resilient infrastructure, monitoring, and compliance strongly aligned to existing traditional finance paradigms.

How is the industry adjusting to the increasing prevalence of the cloud?

Capital markets are at a point of inflection in their ability to adopt cloud. The industry has seen deployment of disparate infrastructure that are ideal for point solutions. These types of deployments can solve one of the three requirements – low latency, deterministic, scale – but unless you solve all three, you can’t operate or make an efficient market. The cloud has matured to a point where we will see an intentional set of capabilities that will help meet these requirements. 

Hedge funds and asset managers are set to continue to accelerate investments to maximise researcher productivity through the movement of research and simulation infrastructure workloads to the cloud. We’ll see a shift away from proprietary systems towards managed services that improve capabilities, availability, and shift resources to models and algorithms over infrastructure. 

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As part of the agreement, Deutsche Börse will utilise Google Cloud as its preferred partner for cloud consumption for the next 10 years, alongside receiving help from the platform to enhance its cloud adoption and efficiency.

Google Cloud’s infrastructure and data and analytics capabilities will be leveraged by Deutsche Börse to develop its digital securities platform D7, innovate its digital asset market operations, and enhance its data distribution and data use cases in the cloud.

“Innovation and technological advancements are at the core of Deutsche Börse Group’s DNA,” said Theodor Weimer, chief executive of Deutsche Börse.

“To trailblaze changing market environments and not only meet but anticipate customer demand, it is key to couple our financial services expertise with the technological prowess of a true market heavyweight. Our deep market infrastructure understanding, combined with Google Cloud’s technology expertise and scale, will drive tangible success for our business and broader financial markets.” 

The development of Deutsche Börse’s digital securities services platform, D7, will be accelerated through the partnership. Google Cloud’s scalable and secure infrastructure will underpin the D7 platform, with a data analytics layer powered by Google Cloud’s BigQuery and Analytics Hub, as well as Google’s data capabilities.

According to Deutsche Börse, its digital asset business will be innovated with an institutional-grade offering, including a digital assets business platform with a cloud-native market infrastructure, combining centralised and decentralised financial infrastructure to deliver crypto spot and derivatives products. These capabilities are expected to be expanded to additional asset classes over time.

A data mesh is also planned to be deployed by the two companies for Deutsche Börse’s various data distribution and data use cases in the cloud. The new platforms will be underpinned by Google Cloud’s infrastructure alongside its data and connectivity products.

Read more: LSEG to spend £2.3 billion on Microsoft cloud partnership as part of expansive 10-year deal with tech giant

“Exchanges sit at the epicenter of the financial ecosystem and have an increasingly important role to play to drive the future of market innovation and efficiencies,” said Thomas Kurian, chief executive of Google Cloud.

“Our partnership with Deutsche Börse Group underscores the wide range of opportunities and benefits that secure and reliable cloud technology, data analytics, and AI can have for all market participants.” 

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B-PIPE offers global real-time access to consolidated market data covering over 35 million instruments, 330 exchanges and 80 billion ticks a day – the only financial data provider to do so.

Access through Google Cloud infrastructure will offer customers the chance to make investing decisions faster and assess execution quality, measuring risk in real-time. The Google Cloud B-PIPE connectivity model uses Bloomberg’s Open API (BLPAPI), providing consistency and resiliency for hybrid and multi-cloud deployment strategies.

 In addition to streaming B-PIPE market data, Bloomberg offers multiple services natively in Google Cloud that can help traders, quants and data scientists evolve their strategies. These tools and services include Bloomberg’s textual news and news analytics; new issues notification service; and real-time volatility service. Bloomberg’s Liquidity Assessment tool (LQA) is also accessible as part of B-PIPE on Google Cloud, giving a quantitative evaluation of market liquidity across multiple asset classes. 

“As data scientists look to embed more sophisticated analytics within front-office applications, they need seamless access to high-quality real-time data in the cloud without compromising reliability, performance or cost,” said Cory Albert, global head of cloud strategy for Bloomberg’s Enterprise Data division.

“Data is the driving force behind the growth of the financial markets,” added Philip Moyer, vice president, strategic industries, Google Cloud. “We are thrilled to work with Bloomberg to enable access to the industry’s leading real-time market data through Google Cloud’s secure, sustainable and scalable infrastructure.”

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The new tool allows the bank’s traders and risk managers to run “what if” scenarios intraday to assess the necessary capital requirements to cushion any potential ratings downgrades and default risk of corporate bonds among other credit products.

As the market continues its migration to more sustainable forms of investment, HSBC confirmed that its risk development team had plans to adapt the tool later down the line in a way that could help its traders understand the level of susceptibility their books had to climate risk by considering environmental social and corporate governance (ESG) scores.

“The computing power of Google Cloud makes it much quicker to run complex simulations for many different what-if scenarios, providing a more holistic risk picture of trading for optimum decision-making,” said Ajay Yadav, global head of fixed income and digital strategy for traded risk at HSBC.

“HSBC’s digital development team built this innovative capability in less than five months in collaboration with Google Cloud. The focus now is to take the HSBC Risk Advisory tool and integrate climate risk into it as a proof of concept, which we are aiming to make available in the next few months.”

Several major participants have confirmed cloud-focused partnerships and initiatives in the last year to harness the growing number of data sets now necessary for achieving best execution and mitigating risk in the market.

Most recently in June earlier this year, BMO Financial teamed up with Amazon Web Services for its cloud transformation while in the same month Morgan Stanley partnered with Microsoft to drive its cloud strategy and address innovation issues in the wider market.

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The initiative will see BNY Mellon leverage Google Cloud data analytics, artificial intelligence (AI) and machine learning technologies to develop new collateral management and liquidity solutions, helping clients to achieve significant capital savings. 

The $20 trillion US treasury market is the largest and most liquid bond market in the world, used as a barometer for asset quality and a basis for pricing and hedging other assets. On a typical day, approximately 2% of transactions fail to settle.

Settlement fails in the US treasury market have become a significant area of focus for custodians to address. In September 2019, disruption in the repo markets caused daily incidence of treasury fails to spike twice above $100 billion, according to data from the DTCC, more than double the average in late 2019.  

Most recently during the height of the COVID-19 crisis, demand for cash and cash-like instruments such as treasuries was drastically higher than normal, compounding the issue of settlement fails. 

BNY Mellon predicts its new initiative will help traders predict approximately 40% of settlement failures in Fed-eligible securities, with a roughly 90% accuracy.

“A settlement failure occurs when a buyer and seller fail to exchange cash and securities by the close of business on the scheduled settlement date,” said Brian Ruane, CEO of BNY Mellon Clearance & Collateral Management. 

“This prediction model could be a game-changer for market participants and is a tremendous showcase of how we are leveraging emerging technologies, such as the public cloud, to accelerate the delivery of meaningful solutions for our clients.”

The collaboration is the latest from BNY Mellon as it looks to leverage new capabilities from some of the industry’s largest technology providers. Last year, it partnered with Microsoft Azure to offer three new services on its cloud platform including a new data vault, fund distribution analytics and environmental, social and governance analytics.

The investment bank also stated it is developing AI-powered solutions for securities lending, liquidity forecasting, dynamic controls for pricing, anomaly detection for transactions, and automated document processing.

It plans to make further use of the Google Cloud to support more development environments, making code delivery quicker and reducing infrastructure costs.

“BNY Mellon is building on its existing capabilities, using the latest cloud technologies to test and refine its approach to reduce treasury settlement failures, ultimately helping its clients save money and helping transform the US treasury market,” said Rob Enslin, president of Google Cloud. 

“We’re proud to have helped BNY Mellon use our leading data analytics and artificial intelligence technologies to transform the settlement and clearing process, and set an example for the industry overall.”

Last year, Deutsche Bank launched a new service to provide early warnings to traders around settlement delays and potential failures in securities transactions. Powered by search technology firm Elastic, the bank said it would use machine learning and anomaly detection features to enable clients to avoid hefty financial penalties under the upcoming implementation of the Settlement Discipline Regime in Europe.

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Deutsche Bank has finalised a major agreement with Google to migrate its operations and systems to the cloud, including its Autobahn institutional electronic trading platform.

The multi-year strategic partnership will see Google Cloud reshape Deutsche Bank’s products and services for up-to-date and managed cloud applications environment to increase flexibility.

Several use cases under the partnership were being considered, Deutsche Bank said, including new lending products to support pay-per-use models as an alternative to purchasing assets outright and enhancing the bank’s Autobahn platform to create personalised recommendations.

Deutsche Bank and Google confirmed their plans to unite under a strategic cloud technology partnership in July earlier this year.

“With Google Cloud by our side, we have a strategic partner that will accelerate our technology transformation, enable us to use data more intelligently and provide a flexible and safe environment for us to quickly deliver new products and services,” said Bernd Leukert, chief technology and data and innovation officer at Deutsche Bank. “This is the blueprint for bringing together the relative strengths within banking and technology for the benefit of our clients.”

The partnership will also encourage contributions from start-ups and FinTech providers that Deutsche Bank and Google Cloud are looking to co-innovate with to support the bank’s transformation goals.

“Mobile self-service options, artificial intelligence-based recommendations, and other innovations are transforming the banking experience for businesses and consumers around the world,” said Rob Enslin, president at Google Cloud.

“Our partnership with Deutsche Bank will bring new innovations to life and further establish the financial services industry as an early technology adopter. Deutsche Bank is a trailblazer in the industry, and we couldn’t be more thrilled to partner with such an important market leader.”

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Both organisations have signed a ‘letter of intent’ and plan to sign the multi-year contract within the next few months. Deutsche Bank will overhaul its current IT architecture and systems, and gain increased access to data science, artificial intelligence and machine learning technologies.

The new technologies will assist Deutsche Bank’s treasury clients with day-to-day tasks such as cash flow forecasting, improved risk analytics, and advanced security solutions.

“This cooperation with Google Cloud is a significant step forward for our technology strategy, and will transform the way we produce and deliver our client services,” said Bernd Leukert, Deutsche Bank’s chief technology, data and innovation officer. “By bringing together the best of both cultures, we look forward to creating new business models leveraging artificial intelligence, data analytics, and more, with an established technology and innovation leader.”

Deutsche Bank added it has been vetting potential new technology partners since February 2020 to support its multi-vendor cloud strategy, while creating next-generation financial products. The bank will continue to work closely with its existing technology partners, but will move forward with Google to deliver its new cloud service.

The major deal with Google follows Deutsche Bank’s move to expand its client communication channels with WhatsApp via the Symphony platform. Deutsche Bank integrated WhatsApp with the Symphony platform so it can chat securely with clients at any time, while meeting compliance criteria such as data retention and surveillance.

“The partnership with Google Cloud will be an important driver of our strategic transformation,” said Christian Sewing, CEO, Deutsche Bank. “It demonstrates our determination to invest in our technology as our future is strongly linked to successful digitisation. It is as much a revenue story as it is about costs.”

Deutsche Bank is in the midst of a major business transformation and restructuring plans, which includes a targeted reduction in adjusted costs of around €6 billion by 2022 and the loss of approximately 18,000 full-time positions. The bank’s electronic equities and prime brokerage clients have also been transitioned to BNP Paribas under the restructure.  

“For more than 150 years, Deutsche Bank has been an industry pioneer, with a strong record of innovation in the financial services sector,” Sundar Pichai, CEO of Google and Alphabet, commented. “We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry.”

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