Capital Markets

Ensuring compliance supports your business strategy

All banks that operate in the capital markets must comply with a growing volume of financial regulations that are also increasing in complexity. Emerging regulations, such as the Fundamental Review of the Trading Book (FRTB) mean that banks need to manage enormous volumes of data in news ways and perform extensive risk calculations that satisfy the regulator.

For many banks, the pressure of regulatory compliance presents a number of challenges, including:

Data management
Analytics and analysis
Alignment and consistency
Technology and innovation
Governance and control

Ongoing regulatory compliance can offer a powerful competitive advantage, but it is also adds a major additional cost of doing business. To keep costs under control and to mitigate compliance risk, every bank needs to adopt a strategic approach to regulatory compliance that is aligned with its business strategy. Why?

Successful regulatory compliance is increasingly about managing data and technology in a structured and systematic way. Banks that adopt good data governance will be able to deal with an ever-changing body of regulations, confidently and cost effectively.

Align data with regulatory compliance and profitability

GFT can help you achieve a strategic view of your data, so that you can meet the known regulatory requirements and prepare for those that are still unspecified. How?

Data is the lifeblood of financial services. All banks consume and process a wide array of data, from a broad range of sources for an extensive range of purposes; from front-office decision making through to back office reporting. They are also prolific generators of vast quantities of data. Adopting a strategic approach to compliance means storing and managing data in a structured way, so that it can be analysed and used without requiring a major IT investment.

Regulations often require the processing and analysis of large volumes of data. The incoming FRTB requires banks to calculate and report their daily risk exposure, involving vast volumes of data across all asset classes, for both the standard and internal model approaches. This requires immense computing power and a RegTech approach to compliance.

Cloud is a future-proof solution that can offers a scalable RegTech approach which combines technology and innovation to help solve regulatory compliance challenges. With the right approach you can harness the combined power of cloud and high-performance computing (HPC) grids to perform complex calculations, such as full revaluations for Counterparty Credit Risk (CCR) and the ambition to calculate risk in real-time rather than overnight, meeting what is known as the Capital Requirements Regulation (CRR2).

HPC and the cloud

Capital markets participants who already process large volumes of data will most likely already be utilising the power of on-premise grid computing to undertake large computational calculations, although the processing capability is limited by the physical compute size. Most on-premise grids are sized to be able to deal with standard capacity, plus an overnight spike in processing for simulations and reports, but cannot easily scale to accommodate potential reruns arising from `data errors’, or to cope with new regulatory calculation requirements.

Such challenges arise from the use of an on-premise technology stack, where there is always the risk of excess capacity at most times and insufficient capacity at others, with the danger of new completing processing by the commencement of the next trading day. We believe with the right cloud strategy these risks can be eliminated. How?

By deploying grid processing nodes to the cloud, capital market participants are able to ‘spin up’ enough compute capacity to deal with business processing during the day, then augment this overnight or when additional large and complex calculations are required for compliance purposes. HPC is the perfect use case for utilising the elasticity of the cloud and there is little doubt that migrating HPC to the cloud is essential to simplify regulatory compliance, mitigate the risk of non-compliance and ensure compliance is embedded within business strategy.

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High Performance Computing in the cloud

Although widely acknowledged as a potentially game-changing capability, the adoption of cloud technology for High Performance Computing (HPC) is (...)

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Download our Thought Leadership

High Performance Computing Research Paper

This survey was conducted to examine the current usage and future trends in how High Performance Computing (HPC) is being used within financial (...)

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GFT Cloud readiness assessment

The GFT approach combines a triedand-tested practical assessment of the legacy architecture and an evaluation of the maturity of the candidate (...)

Click to download

Download our Thought Leadership

High Performance Computing in the cloud

Although widely acknowledged as a potentially game-changing capability, the adoption of cloud technology for High Performance Computing (HPC) is (...)

Click to download

Download our Thought Leadership

High Performance Computing Research Paper

This survey was conducted to examine the current usage and future trends in how High Performance Computing (HPC) is being used within financial (...)

Click to download

Download our Factsheet

GFT Cloud readiness assessment

The GFT approach combines a triedand-tested practical assessment of the legacy architecture and an evaluation of the maturity of the candidate (...)

Click to download

GFT can help you explore the many benefits of cloud for your business, create a proof of value and migrate to cloud if appropriate, in order to create efficiencies and business value, and achieve a holistic view of your data for compliance and other purposes. We have participated in cloud since its inception and can help you implement a cloud strategy that’s driven by business benefits, whether that is a hybrid model, public or private cloud or increasingly a multi-cloud solution.

GFT has unparalleled practical expertise that spans legacy and cloud technologies and can help you boost your regulatory agility, by adopting modern methods, including DevOps and microservices.

GFT has partnerships with all major cloud services providers and has a deep understanding of cloud-related technologies, such as Anthos, Kubernetes, DataSynapse, Apigee and Apache Kafka amongst others.

We have a range of solutions, tools and accelerators that offer a guided journey to the cloud and GFT’s Tranquility Base offers a ‘calm landing zone’ where you can build a virtual datacentre that enables you to comply with confidence.

We also offer hybrid and multicloud management, particularly thought he use of Anthos from Google, which is able to seamlessly manage an on-premise and cloud or multicloud environment, from within a single interface.

Capital markets participants have traditionally evolved with a large interconnected array of on-premise technologies and services that have developed over many years, if not decades, forming what is often referred to as a cumbersome, outdated and complex technology monolith. Using a vast array of outdated and disparate technology, the result is a complex combination of on-premise, cloud and third party technologies which defies change, since the whole ‘monolith’ underpins the entire business.

Whilst it may not be possible, practical or desirable to move the entire monolith to microservices, specific applications can benefit enormously from being moved to cloud and reengineered using a microservices architecture which is able to be updated and improved on a continual basis. GFT has extensive experience helping clients explore the benefits of microservices, from Proof of Value, to minimal viable product (MVP) through to complete migration, with engagement plans tailored to meet your specific needs.

GFT has extensive experience of working with capital market participants, from global and domestic investment banks, buyside firms, wealth managers, exchanges and many other market participants. Our rapid client on-boarding processes for new engagements are borne out of extensive experience of ramping up quickly in order to accelerate project delivery and client benefits.