Earlier in my career, I helped Wall Street find cutting-edge solutions to the radical challenges posed by the first great wave of computerization. Today, the changes shaking the financial industry are no less extreme, as firms negotiate the combined forces of globalization and regulation, while adapting to next-level technology that is lightning-fast, hypermobile, and reaching for the cloud.
Several weeks ago, at the 8th Annual High Performance Computing Financial Markets Show and Conference in New York, I outlined Cisco’s vision for the Global Connected Marketplace and the transformational shift in the consumerization of IT that it portends.
Essentially, the next iteration of the financial markets will be a network model. With massive amounts of data moving rapidly across borders and available 24/7 on tablet PCs, smartphones, and desktop/laptop computers, financial firms need a wholly new cloud-based operating model, featuring an integrated architecture to unify all aspects of trading.
This High Performance Trading Fabric would coordinate data center switching, storage, and monitoring in a service-oriented delivery system. Thus, a trader would use an application only on an on-demand basis (drawn from the cloud when it is needed) and pay accordingly, a few minutes or dollars at a time.
Those trades would be in a “mesh” business model, where everybody trades with everybody else. Today, I trade through NASDAQ, the American Stock Exchange, and the London Stock Exchange, each of which has its own billion-dollar data center. Tomorrow, the High Performance Trading Fabric will link those fragmented, global liquidity centers, enabling me to reach any of them through a single, cloud-based access point.
The cloud-based model also frees banks of the huge capital costs of their own data centers, eliminating the inherent hardware, software, upkeep, licensing, power, ventilation, and so on. The resulting increase in business agility enables institutions to focus on their true innovative expertise — generating and providing access to liquidity.
At Cisco, we understand the next-level business model and are looking for new and different ways to compete in the future. Since Cisco sells to every corner of the financial markets industry, we see the problems holistically through a real-world, operational point of view. In response, we are designing products and services that economically drive the advantage around speed, business agility, and technical ability, innovating entirely new ways of delivering these capabilities to the marketplace.
For starters, Cisco and its ecosystem partners are addressing three pressing needs in the emerging Global Connected Marketplace:
- Develop a joint “petri dish” to co-create, collaborate, and iterate new business-model innovations and the technology architecture to exploit them
- Create and nurture an emerging ecosystem of technology disruptors and new competitive federated business models
- Conduct real-world experiments with leading innovators and practitioners at the bleeding edge of innovation and transformation
In short, Wall Street is an innovative, capital-intensive business. And financial firms are on the forefront of adapting to next-generation, cloud-based systems. But the wider picture is ever expanding. These new business models will eventually affect every sector of the economy. The window of opportunity for grasping their importance and adapting to the challenges they pose is now open.