| Shared Grid - Will Investment Banks Put Risk Calculations On The Cloud? |
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| Written by PeterGiddings | |
| Thursday, 22 July 2010 | |
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Who would be an investment banker? Particularly over the last couple of years, investment banks have been through a really tough time, although things are starting to look better for them now. The investment banks who have actually done better than their competitors through the financial crises have done so primarily because of their technology strategies.
Who would be an investment banker? Particularly over the last couple of years, investment banks have been through a really tough time, although things are starting to look better for them now. The investment banks who have actually done better than their competitors through the financial crises have done so primarily because of their technology strategies. However, the banks will need to continue looking at how they can make best use of technology if they want to stay compliant with the various regulations that are coming out around risk management procedures and practices. What many of the banks have only recently started to realize, is that these new risk calculations will need something like 10x the compute power than was required previously. Which begs the question, where are these resources going to come from? It will be difficult for the banks to find the necessary resources in their existing data centres, because these data centres are already being heavily utilized. This situation has led banks to start looking more seriously at technologies like grid computing and cloud computing. Particularly because investment banks can be very heavy users of compute power at certain times of day (or night) when they are running heavy risk calculations, but they under-utilize their compute resources at other times, when they may ony be using less than 50% of available capacity. Sharing compute resources and using cloud computing would seem like the sensible answer, but there are problems associated with that approach. First of all, the high performance computing (HPC) applications typically run by investment banks don't sit too well on the cloud. This isn't the biggest issue however. The key problem is that banks generally don't like to share, particularly not with their competitors. Then we have the security implications. Although cloud computing is a lot more secure now than it was in the past, banks are still generally reluctant to utilise any shared compute resources where they do not have complete control of the security around those resources. Last but not least is the whole issue around service level agreements (SLAs), where banks typically need to have guaranteed delivery times for risk calculations for example. The answer could be a new paradigm known as Grid as a Service (GaaS), whereby high performance compute is offered on-demand, across the grid, on a pay-as-you-go basis. Banks could encapsulate specific calculations and send them off to allocated compute resources in a shared environment. This would allow banks to exploit all the various cloud infrastructure, services, middleware and compute power. Although Grid as a Service is still a relatively new concept, it could change the whole face of investment banking technology. About the Author: Peter Giddings is a former banker and IT consultant who writes extensively on banking technology and related topics such as grid as a service. This article gave just an outline overview. For additional information, including various free-to-download white papers on this and related topics, visit ideas.excelian.com From the Webmaster: "Having the opportunity to share my hobbies and interests with so many people around the world gives me great satisfaction. As a bonus, I blog and produce websites about topics that interest me and receive ad revenue from the websites and Blogs."
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