Across all industries – but particularly those in heavily regulated industries such as finance – the talk is about the shift to the public cloud. It is the buzzword of the moment. Amazon, Google and Microsoft are leading a charge to move as much computing
power as possible to cloud-driven services, and everyone seems to be following, with good reason.
There are a lot of advantages to using the public cloud, largely around flexibility and simplicity but along with this shift come a number of inherent risks. This two-part series seeks to explore some of these risks, as well as showcase how financial market
participants can potentially protect themselves against them.
Traditionally, many financial firms have shied away from new technologies, with the public cloud being no exception. However, a recent survey by Refinitiv has shown that financial services organisations are increasing their spending on public cloud in order
to help them automate regulatory functions, such as reporting, and manage costs in light of today’s heightened regulatory pressure.
Accidents will happen
For many organisations, mission critical applications rely on the public cloud, and access to the public cloud is via the internet. In the financial services sector, where business continuity is so important and milliseconds are vital during trading activities,
organisations who rely on cloud services need to consider what happens when their internet connections are down.
While there’s resilience in the internet’s amorphous core, massive infrastructure outages can and do occur. Recently, there have been multiple unrelated fibre cuts that caused major internet outages on both the CenturyLink and Zayo backbones, taking down
internet access around the United States for many hours at a time.
Some of these outage incidents are due to fibre cuts but it begs the question, what happens when the issue is rooted in configuration? In 2017, there was a 90-minute outage in the US due to an engineer having made a misconfiguration, which led to a route
leak issue and created a ripple effect. As a result, providers such as Verizon, Comcast and Spectrum saw their customers unable to access the internet.
Despite these examples, North America firms don’t have a monopoly on internet outages. Only in September last year, BT internet users in London, Glasgow, Birmingham, Rotherhithe and Cardiff reported a mass outage. Similarly, there have been other incidents
causing internet unavailability in Singapore and Australia. Clearly, this is a global issue.
Of course, it’s not just the internet that can have outages. Sometimes the public clouds themselves go down. In July 2018, Google experienced an outage to their Global Load Balancers that took down Spotify, Snapchat and other popular services. Indeed, last
year, Amazon saw two distinct power outages in the US East region of AWS in March and June further deepening mistrust of the public cloud.
Indeed, with internet outages rife, is it any surprise that financial services firms have been slow to adopt the technology? Part two of this series will discuss further causes of outages and unavailability, security concerns with the cloud, as well as draw
conclusions on how fintech can help financial firms to keep continuity and connectivity to mission critical applications when using the public cloud.