The panel kicked off by covering the extent of cloud integration by certain exchanges. On one hand, the Stock Exchange of Thailand (SET) has been on their cloud journey for more than 10 years now, starting from 100% on-premises infrastructure, to its current state being about 40-50% cloud-based. SET uses the cloud to take advantage of its flexible compute power to perform data analytics and stream data directly to Thai investment apps. SET also employs an efficient ‘cloud burst’ system that uses cloud computing resources whenever on-premises infrastructure reaches peak capacity. The benefits of using cloud were cited as scalability, the ability to go serverless by programming directly on the cloud through the support of a growing number of cloud-native applications, and reduced cost of operations.

A more typical example of the majority of stock exchanges today, however, is the JSE. The South African-based exchange is still in the early stages of moving to cloud and is in the process of assessing how to best manage this process in terms of its clients as well as the exchange itself. During this transition period, the JSE is committed to providing a market with transparent and efficient systems, along with cost efficiencies. 

Cloud has brought a number of benefits to financial markets participants in general, including the ability to store large amounts of data. This is essential when it comes to firms retaining large datasets (typically required by high-frequency traders (HFTs), brokers or exchanges), or meeting regulatory requirements. The cloud has also lowered the barrier to entry, especially for emerging exchanges, because prohibitively expensive co-location charges can be bypassed. 

One thing that all panellists agreed on was that co-location was not going away anytime soon. This is due to issues around latency and the prevalence of multicast packet drop in certain infrastructures – though exchanges might be encouraged to know that both AWS and COLT are developing solutions to solve these issues.