Skip the navigation
News Analysis

Wall Street not bullish on cloud computing

Financial firms are trying cloud computing, but execs remain wary that key data could be exposed.

September 27, 2010 06:00 AM ET

Computerworld - Wall street firms have been slow to take full advantage of the potential financial and resource savings available through cloud computing because they have security and regulatory concerns, say IT executives.

For example, while Nasdaq OMX Group Inc. uses cloud computing systems within its firewall to access historical market data, IT executives there aren't yet confident that transactional data would be adequately protected in the cloud, said Nasdaq Chief Technology Officer Mats Andersson at the High Performance Computing Financial Markets conference last week in New York.

Dan Hall, manager of systems design and engineering at IntercontinentalExchange Inc., said the online commodities exchange is running Amazon.com's S3 cloud computing service only in a test environment, primarily because officials have concerns about security. "We only use it once in a while for load testing," he said.

Deutsche Bank AG has been using a hybrid private-public cloud computing infrastructure for testing and development for 18 months or so.

The limited usage has put internal critics of the technology at ease, said Tony Pizi, head of the financial services firm's next-generation infrastructure group.

Pizi noted that top executives at Deutsche Bank have been very open-minded about cloud and its benefits, but they also recognize the challenges the technology can present to large companies.

Richard Sharp, a partner in the law firm Milbank, Tweed, Hadley & McCloy LLP in New York and former head of trading practices at the U.S. Securities and Exchange Commission, warned financial services IT executives to be especially wary of regulatory requirements when considering whether to turn to cloud computing. For example, Sharp said, regulators today are applying rules based on their view that cloud computing is an outsourced service.

"The first thing regulators are going to say is, 'You're going to give up control of your IT infrastructure? We need to talk,' " he said.

In recent months, Sharp added, the SEC and the Financial Industry Regulatory Agency (FINRA) have appeared to be close to taking a position that broker-dealers can't move funds and securities through the cloud. "These are viewed as off-limits," he said. "So there's a very active debate going on, and new rules are expected shortly from FINRA that will regulate cloud computing."

Nonetheless, Pizi has high long-term hopes that use of cloud computing will spread among Wall Street firms. The technology could one day be a "game-changer," he said, adding, "I don't think anyone thinks the Internet didn't fundamentally change the world. This is of the same magnitude."

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

Read more about Government/Industries in Computerworld's Government/Industries Topic Center.



What is Tech Briefcase?
TechBriefcase is a new, free service where IT Professionals can Search, Store and Share IT white papers and content like this. Learn more
Bookmark content
Speed up your research efforts with content across the web.
Search and Store
Find the white papers you need. Create folders for any topic.
View Anywhere
Open your briefcase on your iPhone, tablet or desktop. Share with colleagues.
Don't have an account yet?
Additional Resources
Security KnowledgeVault
WHITE PAPER
Security is not an option. This KnowledgeVault Series offers professional advice how to be proactive in the fight against cybercrimes and multi-layered security threats; how to adopt a holistic approach to protecting and managing data; and how to hire a qualified security assessor. Make security your Number 1 priority.

Read now.

Cut Communications Costs Once and for All
WHITE PAPER
New IP-based communications systems are being deployed by small and midsized businesses at a rapid rate. Learn how these organizations are enabling faster responsiveness, creating better customer experiences, speeding office or mobile interactions, and dramatically reducing existing communications costs.

Read now.

Government/Industries White Papers
The Essential Guide to Choosing a Web Analytics and Online Marketing Solution
Today's customers have information at their fingertips and can dictate a new set of terms in the dynamic relationship between buyers and sellers....
Plugging Information Leaks
Unlike traditional data leak prevention solutions, which work at the network or desktop level, Attachmate Luminet software monitors end-user activity at the application...
Shine a Light on Insider Abuse
This solution brief describes the four technical challenges you face and tells you how Luminet can help you overcome them.
Threats from Within Your Government Agency
This solution brief tells how Attachmate Luminet fraud management software can help government agencies and departments get ahead of the fraud curve-by providing...
Meeting the PCI-DSS Compliance Challenge
This solution brief describes the four technical challenges you face and tells you how Luminet can help you overcome them.
All Government/Industries White Papers
Government/Industries Webcasts
Distributed Database Security with Real-time Monitoring
View this demo and learn how IBM InfoSphere Guardium database activity monitoring can help protect your sensitive data in distributed DBMS environments with...
InfoSphere Warehouse Packs Demo
These flash modules make warehousing more tangible and relevant to business users through detailed explanations of the InfoSphere Warehouse Packs.
Delivery Management -- Extending Lifecycle Management
Date: Wednesday, June 20, 2012, 1:00 PM EDT

Siloed organizations continue doing the wrong things and doing things wrong, leading to increased costs,...
Leverage automation today to reduce IT complexity
Date: Tuesday, June 5, 2012, 2:00 PM EDT

Whether your B2B complexity is caused by multiple technologies due to M&A, business or application specific...
Redefine Expectations in the Data Center
Need to do more with less? Watch this video to learn how HP ProLiant Gen8 servers can help your business deploy servers three...
All Government/Industries Webcasts
Newsletter Sign-Up

Receive the latest news test, reviews and trends on your favorite technology topics

Choose a newsletter
  1. View all newsletters | Privacy Policy
IT Jobs