Regulatory-induced Challenges Create Hurdles to Cloud Adoption for Financial Services Firms

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The financial services industry is evolving at a rapid pace, with shifting consumer expectations, new technologies, and developing regulatory requirements. Financial services firms need the right technology to help them stay agile and prepare for the future.
The cloud is a key point of leverage for firms looking to improve performance across a broad range of activities. Moving to the public cloud can advance operational resiliency, improve staff productivity, increase regulatory compliance and enhance business model innovation.
However, there are a number of financial services companies that are still hesitant in their cloud journeys. The barriers to adoption vary, from the complexity of legacy systems, to trust and skills gaps, regulatory uncertainty, and fragmentation of compliance requirements. Although many companies have embraced the benefits of cloud technology, more robust cloud adoption—especially around core back-office functions—will require additional facilitation, including through regulatory harmonization and streamlining.
A new comprehensive study on cloud adoption in financial services
To better understand the challenges and opportunities of cloud adoption in financial services Google Cloud, together with the Harris Poll, surveyed more than 1,300 leaders from the financial services industry across the United States, Canada, France, Germany, United Kingdom, Hong Kong, Japan, Singapore and Australia.
There were five noteworthy takeaways from the study:
1. A vast majority of financial services companies are already using some form of public cloud. A large number of surveyed financial services companies (83%) report they are deploying cloud technology as part of their primary computing infrastructures. Of those using cloud technology, the most popular architecture of choice is hybrid cloud (38%), followed by single cloud (28%), and multicloud (17%). Notably, of respondents without a multicloud deployment, 88% reported they are considering adopting a multicloud strategy in the next 12 months.

2. Financial services institutions in North America are leading in cloud adoption. Of the financial services companies who are implementing a cloud strategy, the highest levels of cloud workload adoption were reported in North America, with institutions in the U.S. (54%) and Canada (52%) leading the way. The lowest level of cloud adoption was reported in Japan (42%).

3. As financial services companies continue to use the cloud, more core functionalities can and will be migrated. While many financial services companies have migrated substantial workloads to the cloud, the industry is far from full adoption when it comes to core, back-office workloads. Of financial services companies currently using a majority cloud strategy in the United States, for example, only half (54%) of their workloads are fully deployed in the cloud. Data and IT security (74%), regulatory reporting (57%), and fraud detection and prevention (57%) rank among the highest workload adoption. Core underwriting activity (40%) and data reconciliation (48%) ranked lowest. Across Europe, cloud usage for core activities like underwriting also scored low with the UK listing only 30% adoption.
4. Among respondents, there is a very strong positive perception of the potential for cloud technology to assist in business operations and regulatory compliance. Nearly all respondents (>88%) agreed that cloud adoption can:
- help adapt to changing customer behaviors and expectations,
- enhance operational resilience,
- support the creation of innovative new products and services,
- enhance financial services institutions’ data security capabilities, and
- better connect siloed legacy software infrastructure within financial services institutions.
5. Certain regulator-induced challenges, including the complexity of sectorial compliance frameworks and fragmentation, create hurdles to cloud adoption for financial services companies. While 88% of respondents had a positive view of current regulatory efforts to provide guidance and clarity for cloud implementation, the results showed that more needs to be done to facilitate adoption. Most respondents (84%) agree that regulatory reviews and approvals take too long because of regulatory fragmentation across regulatory bodies. And 78% say that regulatory uncertainty over the use of public cloud prevents their organizations from adopting cloud technologies that would otherwise provide benefit to them. Additionally, a third of all on-premises respondents (38%) say that the large investment of resources for the regulatory approval process is a reason why they’re not using cloud services.
“While many banks have already deployed hybrid cloud environments, others are still in various stages of planning and deploying,” said Jerry Silva, research vice president for IDC Financial Insights. “Clearly, hybrid infrastructure is a reality, and financial institutions must focus not only on leveraging the modern infrastructure model to gain efficiencies, resilience and agility, but also on taking the necessary steps to manage such environments, including the security and compliance of cloud services.”
Future recommendations for financial services regulators
Financial services firms should continue to maximize the potential of technology by migrating more core workloads to the cloud, and actively considering multicloud and hybrid-cloud strategies. Such strategies enhance resiliency of existing IT infrastructure and reduce concerns over vendor lock-in.
The research also points to steps that regulators could take to provide additional clarity and guidance, such as aligning regulatory reviews across agencies to avoid fragmentation; developing regulatory “safe harbors” for cloud adopters based on adherence to accepted standards and best practices; training regulatory staff on emerging tech; and advancing data reporting requirements via cloud and related technologies.
In the past few years, many regulators across the globe have taken a robust approach to rationalizing rules and guidance to cloud adoption in the financial sector, which has helped significantly stimulate adoption. But further assurances and harmonization of best practices around supervision is needed to advance risk-based and secure digital innovation.
At Google Cloud, we’re committed to working with financial services customers and regulators to provide them with controls and assurances on risk management, data locality, transparency, and compliance. We are constantly engaging with regulators to share information, respond to their considerations and concerns, and address questions in the interest of transparency and building trust.
To learn more about these findings and more, download our infographic and our full report.
Research methodology
The survey was conducted online by the Harris Poll on behalf of Google Cloud, from December 7, 2020, to January 4, 2021, among 1,363 senior executives in France (n=113), Germany (n=178), the UK (n=192), Hong Kong (n=99), Indonesia (n=100), Japan (n=142), Singapore (n=71), Australia (n=134), Canada (134), and the United States (n=200) who are employed full-time, part-time, or self-employed whose main functional role is in risk/compliance or IT at a company in the banking, finance, or financial services industry with a title of director level or higher. The data in each country were weighted by the number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.
Google Cloud’s High-performance Compute Speeds Up the Chip Design Process

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Cloud offers a proven way to accelerate end-to-end chip design flows. In a previous blog, we demonstrated the inherent elasticity of the cloud, showcasing how front-end simulation workloads can scale with access to more compute resources. Another benefit of the cloud is access to a powerful, modern and global infrastructure. On-prem environments do a fantastic job of meeting sustained demand but Electronic Design Automation (EDA) tooling upgrades happen much more frequently (every six to nine months) than typical on-prem data center infrastructure upgrades (every three to five years).
What this means is that your EDA tool can provide much better performance if given access to the right infrastructure. This is especially useful in certain phases of the design process.
Take for example, a physical verification workload. Physical verification is typically the last step in the chip design process. In simplified terms, the process consists of verifying design rule checks (or DRCs) against the process design kit (PDK) provided by the foundry. It ensures that the layout produced from the physical synthesis process is ready for handoff to a foundry (in-house or otherwise) for manufacturing. Physical verification workloads tend to require machines with large memories (1TB+) for advanced nodes. Having access to such compute resources enables more physical verification to run in parallel, increasing your confidence in the design that is being taped out (i.e., sent to manufacturing).
At the other end of the spectrum are functional verification workloads. Unlike the physical verification process described above, functional verification is normally performed in the early stages of design and typically requires machines with much less memory. Furthermore, functional verification (dynamic verification in particular) accounts for the most time (translating directly to the availability of compute) in the design cycle. Verifying faster, an ambition for most design teams, is often tied to availability of right-sized compute resources.
The intermittent and varied infrastructure requirements for verification (both functional and physical) can be a problem for organizations with on-prem data centers. On-prem data centers are optimized for maximizing utilization—this does not directly address access to right-sized compute to deliver the best tool performance. Even if the IT and Computer Aided Design (CAD) departments choose to provision additional suitable hardware, the process of provisioning, acquiring and setting up new hardware on-prem typically takes months for even the most modern organizations. A “hybrid” flow that enables use of on-prem clusters most of the time, but provides seamless access to cloud resources as needed would be ideal.
Hybrid chip design in action
You can improve a typical verification workflow simply by utilizing a hybrid environment that provides instantaneous access to better compute. To illustrate, we chose a front-end simulation workflow, and designed an environment that replicates on-prem and cloud clusters. We also took a few more liberties to simplify the environment (described below). The simplified setup is provided in a GitHub repository for you to try out.
In any hybrid chip design flow, there are a few key considerations:
- Connectivity between on-prem infrastructure and the cloud: Establishing connectivity to the cloud is one of the most foundational aspects of the flow. Over the years, this has also become a very well-understood field, and secure, high availability connectivity is a reality in most setups.
In our tutorial, we represent both on-prem and cloud clusters as two different networks in the cloud where all traffic is allowed to pass between these networks. While this is not a real-world network configuration, it is sufficient to demonstrate the basic connectivity model. - Connection to license server: Most chip design flows utilize tools from EDA vendors. Such tools are typically licensed, and you need a license server with valid licenses to operate the tool. License servers may remain on-prem in the hybrid flow, so long as latency to the license server is acceptable. You can also install license servers in the cloud on a Compute Engine VM (particularly sole-tenant nodes) for lower latency. Check with your EDA vendors to understand if you can rehost your license services in the cloud.
In our tutorial, we use an open source tool (Icarus Verilog Simulator) and therefore, do not need a license server. - Identifying data sources and syncing data: There are three important aspects in running EDA jobs: the EDA tools themselves, the infrastructure where the tools run, and the data sources for the tool run. Tools don’t change much, and can be installed on cloud infrastructure. Data sources, on the other hand, are primarily created on-prem and updated regularly. These could be SystemVerilog files that describe the design, the testbenches or the layout files. It is important to sync data between on-prem and cloud to maintain parity. Furthermore, in production environments, it’s also important to maintain a high-performance syncing mechanism.
In our tutorial, we create a file system hierarchy in the cloud that is similar to one you’d find on-prem. We transfer the latest input files before invoking the tool. - Workload scheduler configuration and job submission transparency: Most environments that leverage batch jobs use job schedulers to access a compute farm. An ideal environment finds the balance between cost and performance, and builds parameters in the system to enable predictive (and prescriptive) wrappers to job schedulers (see picture below).
In our tutorial, we use the open-source SLURM job scheduler and an auto-scaling cluster. For simplicity, the tutorial does not include a job submission agent.

Other cloud-native batch processing environments such as Kubernetes can also provide further options for workload management.
Our on-prem network is called ‘onprem’ and the cloud cluster is called ‘burst’. Characteristics of the on-prem and burst clusters are specified below:


Once set up, we ran the OpenPiton regression for single and two-tile configurations. You can see the results below:

Regressions run on “burst” clusters were on average 30% faster than on “onprem”, delivering faster verification sign-off and physical verification turnaround times. You can find details about the commands we used in the repository.
Hybrid solutions for faster time to market
Of course, on-prem data centers will continue to play a pivotal role in chip design. However, things have changed. Cloud-based, high performance compute has proved itself to be a viable and proven technology for extending on-prem data centers during the chip design process. Companies that successfully leverage hybrid chip design flows will be able to better address the fluctuating needs of their engineering teams. To learn more about silicon design on Google Cloud, read our whitepaper “Using Google Cloud to accelerate your chip design process”.

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IDC recently examined the benefits of implementing BigQuery for SAP data. The findings reveal massive improvements to the SAP customers’ overall business results due to faster access to data insights, lower data warehouse operation cost, and increased productivity among the data warehouse and development teams. Download the report now!
Speed Up Data-driven Innovation in Life Sciences with Google Cloud

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The last few years have underscored the importance of speed in bringing new drugs and medical devices to market, while ensuring safety and efficacy. Over this time, healthcare and life sciences organizations have transformed the way they research, develop, and deliver patient care by embracing agility and innovation.
Now, the industry is set to reap the benefits of cloud technology and overcome the existing barriers to innovation.
What’s holding back innovation?
Costly clinical trials: The process of trialing and developing new drugs and devices is still long and costly, with more than 1 in 5 clinical trials failing due to a lack of funding.1 The high failure rate comes as no surprise when you consider the average clinical trial costs $19 million and takes 10-15 years (through all 3 phases) to be approved.2
Stringent security requirements: Pre-clinical R&D and clinical trials use large volumes of highly sensitive patient data – making the life sciences industry one of the top sectors targeted by hackers.3 On top of this, the FDA and other regulatory bodies have strict requirements for medical device cybersecurity.
Unpredictable supply chains: Global supply chains are becoming increasingly complex and unpredictable. This can be brought on by anything from supply shortages, to geo-political events, and even bad weather. Making things worse is the lack of visibility into medical shipment disruptions – so when disaster strikes you’re often caught off guard.
Google Cloud for life sciences
At Alphabet, we’ve made significant investments in healthcare and life sciences, helping to tackle the world’s biggest healthcare problems, from chronic disease management, to precision medicine, to protein folding.
Together with Google, you can transform your life sciences organization and deliver secure, data-driven innovation across the value chain.
- Accelerate clinical trials to deliver life-saving treatments faster and at less cost. Clinical trials require relevant and equitable patient cohorts that can produce clinically valid data. Solutions like DocAI can enable optimal patient matching for clinical trials, helping organizations optimize clinical trial selection and increase time to value. How that patient data is collected is also important. Collection in a physician’s office captures a snapshot of the participant’s data at one point in time and doesn’t necessarily account for daily lifestyle variables. Fitbit, used in more than 1,500 published studies–more than any other wearable device–can enrich clinical trial endpoints with new insights from longitudinal lifestyle data, which can help improve patient retention and compliance with study protocols. We have introduced Device Connect for Fitbit, which empowers healthcare and life sciences enterprises with accelerated analytics and insights to help people live healthier lives. We are able to empower organizations to improve clinical trials in key ways:
- Enable clinical trial managers to quickly create and launch mobile and web RWE collection mechanism for patient reported outcomes
- Enable privacy controls with Cloud Healthcare Consent API and, as needed, remove PHI using Cloud Healthcare De-identification API
- Ingest RWE and data into BigQuery for analysis
- Leverage Looker to enable quick visualization and powerful analysis of a study’s progress and results
- Ensure security and privacy for a safe, coordinated, and compliant approach to digital transformation. Google Cloud offers customers a comprehensive set of services including pioneering capabilities such as BeyondCorp Enterprise for Zero Trust and VirusTotal for malicious content and software vulnerabilities; Chronicle’s security analytics and automation coupled with services such as Security Command Center to help organizations detect and protect themselves from cyber threats; as well as expertise from Google Cloud’s Cybersecurity Action Team. Google Cloud also recently acquired Mandiant, a leader in dynamic cyber defense, threat intelligence and incident response services.
- Optimize supply chains and enhance your data to prepare for the unpredictable. With a digital supply chain platform, we can empower supply chain professionals to solve problems in real time including visibility and advanced analytics, alert-based event management, collaboration between teams and partners, and AI-driven optimization and simulation.
Ready to learn more? We’ll be taking a deep dive into each of the challenges outlined above in our life sciences video series. Stay tuned.
- National Library of Medicine
- How much does a clinical trial cost?
- Life Sciences Industry Becomes Latest Arena in Hackers’ Digital Warfare
Wipro selects Google Cloud to advance its digital transformation strategy

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Wipro has partnered with Google for migration of its enterprise-wide SAP footprint to the Cloud platform. The engagement will bring SAP applications and workloads to the cloud to support the country’s fourth-largest software services firm’s 180,000-plus employees.
Bhanumurthy B.M, President and Chief Operating Officer, Wipro said that as a provider of digital transformation services to some of the world’s most impactful businesses, it is critical that the company’s own core systems and technologies are running on intelligent and modern platforms that encompass the needs of the future.
“The technology that we’re getting into right now, and the kind of design led approach that we are taking, I think customers will benefit significantly from this,” he told ET.
Read the Full Story on Economic Times
Making Weather Predictions Easy with Weather Research and Forecasting (WRF) Models on Google Cloud!

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Weather forecasting and climate modeling are two of the world’s most computationally complex and demanding tasks. Further, they’re extremely time-sensitive and in high demand — everyone from weekend travelers to large-scale industrial farming operators wants up-to-date weather predictions. To provide timely and meaningful predictions, weather forecasters usually rely on high performance computing (HPC) clusters hosted in an on-premises data center. These on-prem HPC systems require significant capital investment and have high long-term operational costs. They consume a lot of electricity, have largely fixed configurations, and the underlying computer hardware is replaced infrequently.
Using the cloud instead offers increased flexibility, constantly refreshed hardware, high reliability, geo-distributed compute and networking, and a “pay for what you use” pricing model. Ultimately, cloud computing allows forecasters and climate modelers to provide timely and accurate results on a flexible platform using the latest hardware and software systems, in a cost effective manner. This is a big shift compared with traditional approaches to weather forecasting, and can appear challenging. To help, weather forecasters can now run the Weather Research and Forecasting (WRF) modeling system easily on Google Cloud using the new WRF VM image from Fluid Numerics, and achieve the performance of an on-premises supercomputer for a fraction of the price. With this solution, weather forecasters can get a WRF simulation up and running on Google Cloud in less than an hour!
A closer look at WRF
Weather Research and Forecasting (WRF) is a popular open-source numerical weather prediction modeling system used by both researchers and operational organizations. While WRF is primarily used for weather and climate simulation, teams have extended it to support interactions with chemistry, forest fire modeling, and other use cases. WRF development began in the late 1990s through a collaboration between the National Center for Atmospheric Research (NCAR), National Oceanic and Atmospheric Administration (NOAA), U.S. Air Force, Naval Research Laboratory, University of Oklahoma, and the Federal Aviation Administration. The WRF community comprises more than 48,000 users spanning over 160 countries, with the shared goal of supporting atmospheric research and operational forecasting.
The Google Cloud WRF image is built using Google’s MPI best practices for HPC, with the exception that hyperthreading is not disabled by default, and is easily integrated with other HPC solutions on Google Cloud, including SchedMD’s Slurm-GCP. Normally, installing WRF and its dependencies is a time consuming process. With these new WRF VM images, deploying a scalable HPC cluster with WRF v4.2 pre-installed is quick and easy with our Codelab. OpenMPI 4.0.2 was used throughout this work. Google has had good success with Intel MPI, and we intend to study whether further performance gains can be achieved in this context.
Optimizing WRF
Determining the optimal architecture and build settings for performance and cost was a key part of the process in developing the WRF images. We evaluated how to select the ideal compiler, right CPU platform, and the best file system for handling file IO, so you don’t have to. As a test case for assessing performance, we used the CONUS 2.5km benchmark.
Below, the CONUS 2.5km runtime and cost figure shows the run time required for simulating WRF over a two-hour forecast using 480 MPI ranks (a way of numbering processes) for different machine types available on Google Cloud. For each machine type, we’re showing the lowest measured run time from a suite of tests that varied compiler, compiler optimizations, and task affinity.

We found that compute-optimized c2 instances provided the shortest run time. The Slurm job scheduler allows you to map the MPI tasks to compute hardware using task affinity flags. When optimizing the runtime and cost for each machine type, we compared using srun –map-by core –bind-to core to launch WRF, which maps each MPI process to a physical core (two vCPU per MPI rank), and srun –map-by thread –bind-to thread, which maps each MPI process to a single vCPU. Mapping by core and binding MPI ranks to cores is akin to disabling hyperthreading.

The ideal simulation cost and runtime for CONUS 2.5km for each platform is found when each MPI rank is subscribed to each vCPU. When binding to vCPUs, half as many compute resources are needed when compared to binding to physical cores lowering the per-second cost for the simulation. For CONUS 2.5km, we also found that although mapping MPI ranks to cores results in reduced runtime for the same number of MPI ranks, the performance gains are not significant enough to outweigh the cost savings. For this reason, the WRF-GCP solution does not disable hyperthreading by default.
Runtime and simulation cost can be further reduced by selecting an ideal compiler: the figure below (CONUS 2.5km Compiler Comparisons) shows the simulation runtime for the WRF CONUS 2.5km benchmark on eight c2-standard-60 instances, using GCC 10.30, GCC 11.2.0 and the Intel® OneAPI® compilers (v2021.2.0). In all cases, WRF is built using level 3 compiler optimizations and Cascade Lake target architecture flags. By compiling WRF with the Intel® OneAPI® compilers, the WRF simulation runs about 47% faster than the GCC builds, and at about 68% of the cost, on the same hardware. We’ve used OpenMPI 4.0.2 with each of the compilers as the MPI implementation in this work. With other applications, Google has seen good performance with Intel MPI 2018, and we intend to investigate performance comparisons with this and other MPI implementations.

File IO in WRF can become a significant bottleneck as the number of MPI ranks increases. Obtaining the optimal file IO performance requires using parallel file IO in WRF and leveraging a parallel file system such as Lustre.
Below, we show the speedup in file IO activities relative to serial IO on an NFS file system. For this example, we are running the CONUS 2.5km benchmark on c2-standard-60 instances with 960 MPI ranks. By changing WRF’s file IO strategy to parallel IO, we accelerate file IO time by a factor of 60.
We further speed up IO and reduce simulation costs by using a Lustre parallel file system deployed from open-source Lustre Terraform infrastructure-as-code from Fluid Numerics. Lustre is also available with support from DDN’s EXAScaler solution in the Google Cloud Marketplace. In this case, we use four n2-standard-16 instances for the Lustre Object Storage Server (OSS) instances, each with 3TB of Local SSD. The Lustre Metadata Server (MDS) is an n2-standard-16 instance with a 1TB PD-SSD disk. After mounting the Lustre file system to the cluster, we set the Lustre stripe count to 4 so that file IO can be distributed across the four OSS instances. By switching to the Lustre file system for IO, we speed up file IO by an additional factor of 193, which is orders of magnitude faster than a single NFS server with serial IO.

Adding compute resources and increasing the number of MPI ranks reduces the simulation run time. Ideally, with perfect linear scaling, doubling the number of MPI ranks would cut the simulation time in half. However, adding MPI ranks also increases communication overhead, which can increase the cost per simulation. The communication overhead is due to the increased amount of communication necessitated by splitting the problem more finely across more machines.
To assess the scalability of WRF for the CONUS 2.5km benchmark, we can execute a series of model forecasts where we successively double the number of MPI ranks. Below, we show two- hour forecasts on the c2-standard-60 instances with the Lustre file system, varying the number of MPI ranks from 480 to 1920. In all of these runs, MPI ranks are bound to vCPUs so that the number of vCPUs dedicated to each simulation increases with the increase in MPI ranks. While many HPC workloads run best with simultaneous multithreading (SMT) disabled, we find the best performance for CONUS 2.5km with SMT enabled. Thus, the number of MPI ranks in our runs equals the total number of vCPUs.

As you can see, the CONUS 2.5km Runtime & Cost Scaling figure shows that the run time (blue bars) decreases as the number of MPI ranks and the amount of compute resources increases, at least up to 1920 ranks. When transitioning from 480 to 960 MPI ranks, the run time drops, yielding a speedup of about 1.8x. Doubling again to 1920 MPI ranks, though, we obtained an additional speedup of just 1.5x. This declining trend in the speedup with increasing MPI ranks is a signature of MPI overhead, which increases with more MPI ranks.
Determining your best fit
Most tightly-coupled MPI applications such as WRF exhibit this kind of scaling behavior, where scaling efficiency decreases with increasing MPI ranks. This makes assessing cost-scaling alongside performance-scaling critical when considering Total Cost of Ownership (TCO). Thankfully, per-second billing on Google Cloud makes this kind of analysis a little bit easier. As shown above, a second doubling of the count from 960 cores to 1920 cores can provide an additional 1.5x speedup, but at a 32% higher cost. In some circumstances, this faster turnaround may be needed and worth the extra cost.
If you want to get started with WRF quickly and experiment with the CONUS 2.5km benchmark, we’ve encapsulated this deployment in Terraform scripts and prepared an accompanying codelab.
You can learn more about Google Cloud’s high performance computing offerings at https://cloud.google.com/hpc, and you can find out more about Google’s partner Fluid Numerics at https://www.fluidnumerics.com.
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