Future architecture: All roads lead to Cloud

Present vs. Future-State Architecture

Our frenetic activity of client meetings, briefings, conferences, and events heated up in the last few months. We recently spoke to audiences in New York, London, and Tokyo.

The present environment of cost-cutting, evaluation of profitability, capital efficiency, and compliance implementation is consuming much management attention and IT budgets. Operational efficiency and operational risk mitigation are top of mind.

However, across our client base and network of financial institutions and vendors, there is also a continued desire to understand emerging technologies like blockchain/DL and artificial intelligence. Many of you are expressing a strong interest in our opinions on the future state of the technology architecture in parallel with these day-to-day operational considerations.

From this vantage point, we believe the potential of blockchain technology (including smart contracts), IoT, and artificial intelligence will drive incremental IT spending going forward as solutions are implemented, further uses cases are developed and tested, and ecosystems and IT partnerships are expanded.

All Roads Lead to Rome Cloud

With respect to the future IT architecture, one striking conclusion we've reached is that all roads lead to cloud. For instance, major blockchain use cases are being built atop cloud providers. Technology firms such as AWS, IBM, Microsoft, and others appear to be prime beneficiaries of this frenetic activity, some of which is strategic, and some of which may be simply tactical and later disappear. In addition, artificial intelligence may be best leveraged in the future with data that resides in the cloud as opposed to in siloed business operations. Moreover, wealth managers increasingly are considering cloud-deployed solutions. Even compliance (e.g. RegTech) is increasingly being sold "as a service".

Clearly not all capital markets, wealth management, and asset management operations are cloud-friendly, both now and in the future, but many types of operations will move to the cloud.

We see this happening gradually and powered by availability, greater standardization, and creative vendor offerings across a spectrum (from ITO and BPO to managed services, utilities, and yes … cloud possibilities throughout).

Thoughts from IBM’s “World of Watson”

Last week was at the IBM’s World of Watson in NYC – IBM has opened up Watson through the Cloud forming an eco-system where application developers and partners utilizing open APIs can tap into Watson’s cognitive thinking algorithms.  IBM has decided to open the Watson platform to partners and developers for more rapid discoveries of real-applications and perhaps marketable applications. Of course many of the impressive applications targeted health care, mapping genomes, cancer research, synthetic drug pre-trials – some amazing stuff. In the area of finance I’m always a touch skeptical, investors have been trying to find the golden algorithms investment portfolios for centuries and not really convinced that Watson will do much better. However I was very impressed with some Private Equity software firm, Vantage Software in Boston, that was using Watson coupled with an accelerator big data analytics module application, AlchemyAPI out of Denver, to comb through social media for smoke signals about firms that were being tracked. For example a small firm is looking for 3 new analytical PhDs in polymer catalysts – a small signal that something might be popping with the young company. If an analyst is tracking say 250-500 start-ups, no way to track this manually. Of course stay tuned for Watson to show-up more in Wealth Management. Here’s some links to the main tent sessions: