Financial markets were among the first to adopt new technologies, and that has certainly been true of the derivatives markets, which were early adopters of electronic trading. Going forward, new capabilities will transform the way industry participants communicate, analyze, and trade.

I sat down with Google Cloud’s Phil Moyer and former SEC Commissioner, Troy Paredes, for a fireside chat at FIA Boca 2022 to discuss the future of markets and policy, the new technologies that are already paving the way for greater speed and transparency, and how cloud can help promote greater resiliency, performance, and security to enable the long-term vision for the market. The following is a summary of our discussion.

The current state of cloud technology

When it comes to technology adoption, we’re seeing the market and participants adopt cloud technologies, and increasingly, machine learning (ML) on a wider scale. Cloud technology allows for easier, faster, and much more secure experimentation with large datasets and ML.

A recent Google sponsored study by Coalition Greenwich (September, 2021) showed that more than 93% of trading systems, exchanges, and data providers are in some way providing services on the cloud. The same study, revealed that about 72% of the financial industry across the buy side and sell side, intend to consume public cloud-data based market data within the next 12 months.

Data-driven decision-making and risk management have always been, and continue to remain, the cornerstones of the financial markets. Over time, technology innovation has facilitated access to better insights from data, and therefore, better decision-making and the ability to manage risk. That expectation is now mainstream, and will continue to grow in sophistication.

The multi-phased technology trajectory

The movement of exchanges to the cloud will occur in a “crawl-walk-run” fashion, with low-hanging fruits the first to be picked in the near term while bigger, paradigmatic changes will occur over the medium and long term. Some organizations are starting all three stages simultaneously, understanding that each will move at an independent cadence.

The “crawl” phase is one in which foundations are built, starting with organizations moving data to the cloud and experimenting with some degree of analytics. It’s one of the most important phases because it’s where the opportunity to increase transparency and risk management takes shape.

In moving to the cloud, the infrastructure – which in the past relied on a combination of people, processes, and some technology – becomes the code that runs applications. This early phase is key to empowering organizations to shift to a cloud-based, agile-first operating model that makes it easier and more seamless to launch new products in the future, including by freeing up people and resources from IT management to more mission-focused work.

Establishing the cloud operating model simplifies the “walk” and “run” phases where compliance is more automated, latency-sensitive applications are more readily available, and the next generation of exchanges, market participants, and regulators is better prepared to meet future challenges.

The “walk” phase is where much of the innovation happens. Exchanges are making significant progress in leveraging foundational data decisions in the “crawl” phase and innovations in the cloud to improve settlement, clearing, risk management, collateral management, and compliance, and launch new products.

And finally, the “run” phase is where organizations will start to move the latency-sensitive markets to the cloud, as the markets increasingly will demand low-latency and high performance along with transparency and analytics to solve historical obstacles to market access.

Opportunities for both regulators and market participants

Any time significant technological change takes place, regulators explore its implications, particularly with respect to their ability to meet their regulatory objectives.

Increasingly, we are seeing technological change driving more opportunities for regulators and market participants alike. Such changes may also allow better protection of the marketplace, with greater integrity and transparency.

Over time, regulatory regimes – rules, regulations, statutes, interpretations, and guidance – will also adjust to new technologies, both benefiting the marketplace and advancing regulatory goals.

As one example, the cloud is increasing the ability to meet compliance obligations by allowing compliance to be built into transactions. Moreover, predicated on the vision of real-time regulatory reporting, and given the pace of technological change in the marketplace over the last several years, various regulators have been using more advanced analytics. This trend will continue to help them more effectively and efficiently meet their objectives, and monitor and meet the expectations they have for the entire market.

Machine learning’s role in the financial markets

Google Cloud’s head of AI and Industry Solutions, Andrew Moore, said that ML will be doing three key things for us in the next 10 years: giving us meaning, providing concierge services, and serving as a guardian. Extracting information that is critical to investor decision-making can be extremely important. With more data than ever, ML can increase the ability to process it while also becoming more accessible in the cloud and better supporting regulatory objectives.

The technology will likely manifest in trading and anti-money laundering activities as they relate market functions, as well as managing a wide variety of risks – supporting the interests of both investors and regulators in terms of decision-making, surveillance, and protections.

Rather than taking individuals out of the equation, the digitization of markets, assets, and guard rails combined with ML will allow people to focus their expertise in different ways to achieve key objectives.

Building the market foundation for the future

The goals of operational resiliency, security, and privacy will continue to be critical for building the market foundation for both participants and regulators. While technology promises to create advantages in concrete, tangible ways, it will be important to scrutinize potential risks and concerns.

Priority one for technology providers is to build an environment of trustless security, including encryption at motion and encryption at rest, ensuring that markets are operationally resilient while instilling confidence for any exchange that runs on top of that infrastructure. Multicloud architectures and approaches are likely also to be part of the solution for operational resilience.

Throughout time, liquidity has been the outcome of improved access, transparency, and security. Technology providers are responding by sharing both the responsibility for, and fate of, the markets of the future to build an efficient, faster, and more transparent and secure financial industry.

You can learn more about our approach in our newest white paper, Building the financial markets foundation for the future.

Editor’s note: 5G is much more than a network—it’s a platform for innovation with the ability to provide immediate global scale and enable use cases that we haven’t even dreamed of yet. But to achieve this, industry players must come together to drive this growing ecosystem. Today, Erik Ekudden, CTO of Ericsson, and Bikash Koley, VP of Global Networking at Google Cloud, share their insights into the potential of edge and 5G.

Experts consider 2021 to be the year that serves as the inflection point between network readiness and 5G availability. However, communications service providers (CSPs) are still faced with the task of modernizing their networks, systems, and infrastructure to maximize the potential of 5G for themselves and for the enterprise customers they serve. As you weigh whether to tackle this challenge, let’s first examine what’s different about 5G and how CSPs can best leverage 5G and the edge together as an even stronger platform for innovation than just 5G alone.

With 5G, applications and mobile networks are no longer isolated

Let’s first address what 5G brings to the table. Faster speeds and lower latency are expected of course, and throughout the evolution from 2G to 3G to 4G, there’s been a step function in performance improvements with each of these. However, with every generation, applications and networks have been like ships passing in the night. Networks have been unaware of what the applications have been doing and applications have been guessing what the network was capable of. 

What’s different this time around is that there is some real innovation happening with the development and rollout of 5G itself. The network is on a path to become more accessible via APIs so that applications can call on and consume what they need from the networks in a more programmable way. This sets us up for more open architectures and ecosystems.

5G leverages a more open architecture 

One key difference with 5G as compared to prior generations is that it’s the most open and flexible network architecture the CSP industry has seen. This is thanks to its service-based approach and the decoupling of hardware and software components. CSPs are now running core network elements in the public cloud, private cloud, hybrid cloud, and even multi-cloud, which was unthinkable even five years ago.

The flexibility of this more open architecture allows us to push the cloud to the edge while still being able to manage it from a single pane of glass. This is a huge leap forward from traditional networks, which have been domain-specific, managed in silos, and with slow service creation and delivery. Now, hyperscale cloud vendors and network equipment providers are offering solutions that help CSPs break down these silos to enable more flexible, automated networks with improved orchestration, visibility, and control across multi-vendor, multi-cloud and hyperscale cloud-provider environments. In addition, the separation of hardware and software provides a much more flexible and cost-effective way to upgrade from one network generation to the next.

To provide solutions that are relevant to enterprises, CSPs must offer capabilities beyond connectivity. Enterprise service orchestration, including exposure of network assets and network slicing, are foundational capabilities to provide value to the application ecosystem and be in control of the network and the delivered services.

Combining 5G and edge to help industries reimagine user experiences

This convergence of compute, storage and networking at the edge coming together for the first time will enable CSPs and enterprises to offer their customers completely reimagined user experiences. Consider, for example, how the automotive industry might enhance how customers shop for a car. As part of Fiat Chrysler Automobiles’ Virtual Showroom at the recent CES 2021 event, consumers were able to experience the innovative new 2021 Jeep Wrangler 4xe by scanning a QR code with their phones, and then see an Augmented Reality (AR) model of the Wrangler right in front of them—virtually placed on their own driveway or in any open space.

By rendering the model in Google Cloud, then streaming it to mobile devices, visitors could also see what the car looked like from any angle, in different colors, and even step inside to see the interior in incredible detail. That is the true digitization of an industry segment and highlights the device-to-network-to-edge-to-cloud application relationship and how it can impact the user experience.

A programmable network unlocks more application use cases

The programmability of the 5G network will truly enable application developers to utilize all the benefits of the underlying network. Programmability supports ease of use and enables CSPs, integrated software vendors (ISVs) and the ecosystem to have the right network-level APIs exposed so that applications can be optimized based on the network behavior and vice versa. Imagine, for instance, automatically pushing applications from a cloud region to the edge based on network latency and performance metrics.

Finally, 5G’s programmability is also about having the right tools available for developers to build and integrate applications on the network with zero-touch onboarding and validation. With this, we’ve come to the point where the network is now a “platform” for application innovation. 

5G and edge will be all about the ecosystem

One thing is for certain: the shift to 5G will place tremendous focus on the ecosystem, and it needs to be an ecosystem that includes CSPs, public cloud providers, application developers and technology providers, all coming together to optimize the user experiences across industry applications. For instance, Google Cloud and Ericsson recently announced our partnership to deliver 5G and edge cloud solutions for CSPs and enterprise.  In addition, Google Cloud is also teaming up with popular ISVs to deliver more than 200 edge applications from 30-plus partners, all running on our cloud.  

With collaboration across ISVs, cloud providers and network equipment providers, we are enabling the rapid delivery and deployment of new vertical services and applications, leveraging capabilities like Anthos, artificial intelligence (AI), and machine learning (ML), as well as multi-vendor, multi-cloud and hyperscale cloud provider service orchestration and global edge networks such as those provided by Google and telecom service providers.

As members of the technology ecosystem, we talk about compute, storage and networking, but when it comes down to it, it’s about optimally placing these resources—whether in the cloud, at the provider core, at the edge or anywhere in between—to maximize the end-user experience. The openness and programmability of 5G lends itself to collaboration like never before. We predict that in 2022 and beyond, it will be all about the ecosystem coming together to leverage 5G and the edge to build innovations that we can’t yet imagine.

To learn more, watch the full Ericsson 5G Things CTO Focus fireside chat, where we discuss these topics and more.

The practical benefits of migrating SAP systems to the cloud aren’t lost on most businesses. Running SAP in the cloud lets companies simplify tasks, scale quickly, and reduce costs. But as a growing number of organizations are discovering, the cloud is more than the sum of improved processes and workflows. It offers unique and powerful ways to transform an enterprise.

That’s because the cloud is more than a technology. It’s a foundational layer for business and IT transformation. In the best scenario, it unleashes exponential gains that fundamentally change an enterprise. Organizations achieve greater agility and resilience, and they’re equipped to innovate and disrupt like never before.

RISE with SAP and Google Cloud sit at the intersection of these possibilities. RISE with SAP helps organizations embark on the cloud migration journey with minimal risk and on their own terms. Together with Google Cloud, it enables a more advanced framework for a move to the cloud. Think of RISE with SAP on Google Cloud as business-transformation-as-a-service.

Companies move their SAP systems to the cloud for very clear and compelling reasons: 44% say it fuels digital transformation, and 43% are looking to build out a modern IT infrastructure to lower costs and simplify processes. RISE with SAP on Google Cloud takes direct aim at these challenges.

MSC Industrial Supply Co., a premier North American distributor of metalworking and maintenance, repair, and operations products and services to industrial customers views RISE with SAP on Google Cloud as a way to make its IT systems and the business more flexible and scalable by expanding data access in the cloud. With approximately 2 million products and more than 6,500 associates, that’s no small task for the Melville, New York, company.

In June 2021, MSC successfully migrated to SAP S/4HANA Cloud, private edition, running on Google Cloud infrastructure. Through RISE with SAP, MSC adopted cloud resources that were both reliable and scalable, without any disruption to its business operations. Advanced data analytics, machine learning, and other AI capabilities are now available to MSC.

At the center of this transformation is BigQuery, with which MSC data scientists can pinpoint business insights among vast and complex data sets from diverse sources, including Ads, Maps, Shopping, or the Google Marketing Platform. The net effect is significantly less time needed to manage and analyze rich data sets.

Energizer Holdings Inc., a leading manufacturer and distributor of primary batteries (think Energizer Bunny), portable lights, and auto care products, has turned to RISE with SAP on Google Cloud to power its move to SAP S/4HANA. The company wants to automate essential business processes, improve customer service, and boost innovation. It had been using a private cloud solution but needed to gain flexibility while better containing costs.

After migrating through RISE with SAP on Google Cloud, Energizer is able to share data and intelligence to keep teams better informed. The framework has also helped contain costs and support business growth through reduced licensing costs and a more economical and efficient SaaS model.

Inchcape plc, the leading multi-brand automotive distributor for Toyota, Mercedes, BMW and others, is turning to RISE with SAP on Google Cloud to take its business-critical sales, marketing and operations systems, and data into the cloud. Doing so will allow the UK-based company to join a diverse range of datasets into a centralized, secure, and scalable platform for the first time.

With operations in over 40 markets and geographies, Inchcape has complex logistics requirements. Google Cloud supports and offers the types of advanced analytics and machine learning capabilities the company requires for today’s complex manufacturing environment.

GCP Applied Technologies Inc. (GCPAT) is dedicated to the development of high-performance products and the advancement in construction technologies, simplifying the complexities of construction worldwide and delivering value to its customers. As a part of their business transformation initiatives, the company was looking to move from an on-premise data center to a more modern framework that can keep up with evolving demands. GCPAT considered various solution options like non-cloud colocation, but ultimately opted to move to the cloud through RISE with SAP on Google Cloud.

The platform provides a resilient foundation for accelerating business process improvement and innovation while optimizing maintenance and licensing costs. With the ability to deliver transformative solutions across the enterprise, GCPAT is now well-positioned to handle the pace of business change.

Veolia is an international company with nearly 180,000 employees across the globe and activities in three main service and utility areas: water management, waste management and energy services. Veolia, which aims to become the benchmark company for ecological transformation, was looking to digitize its processes and operations with a modern, cloud-based enterprise management system. Fundamental to Veolia’s success is its ability to continually roll out new, digital services to its industrial and municipal clients, so the company needed an enterprise management system capable of adapting quickly as the company’s business model evolves.

Veolia Poland upgraded to S/4HANA Private Cloud Edition on Google Cloud through RISE with SAP. Not only has the company been able to take advantage of a simplified, fully managed, and shortened cloud implementation, it has also been able to extend its existing Google environment, including BigQuery, to place data at the center of its digitization strategy and develop predictive capabilities using Google Cloud AI.

4 steps to cloud success

These successful transformation stories share four key characteristics in common.

• Low-risk path: Each enterprise reduced its risk of migrating to the cloud while speeding up time-to-value. Subject matter experts from Google Cloud and its partners guided each enterprise through the transition, and they were able to take advantage of incentives to defray infrastructure costs through the Google Cloud Acceleration Program.
• Near-zero downtime: By increasing SAP application availability with Live Migration, our success stories dramatically reduced planned outages due to infrastructure and maintenance updates, down to less than 1 percent.
• Room to innovate: With advanced analytics, artificial intelligence, and machine learning capabilities, these enterprises are improving processes, reducing costs and driving new revenue streams. Additionally, they have the ability to experiment with modern applications faster and more securely using their SAP data with Apigee.
• IT sustainability: By moving SAP applications to smarter and more efficient data centers, these success stories instantly reduced their IT emissions, while eliminating guesswork. Now, they can set goals based on seamless, agentless assessments and track progress with Google Cloud tools, analytics and reporting capabilities.

The engine of progress for cloud migrations

RISE with SAP on Google Cloud delivers a modular and low-risk path to the cloud for organizations at various stages of the migration and transformation path by clearing roadblocks and using performance indicators and industry benchmarks to pinpoint the best place to start.

The result? Reporting that’s 100x faster, as well as embedded AI technology, real-time advanced analytics, streamlined data display, consumer-grade UX across devices, strong sustainability, and a 50% reduction in a company’s data footprint. In practical terms, all the numbers add up to a simple but profound conclusion: RISE with SAP on Google Cloud is an engine of progress for organizations looking to gain an advantage in today’s highly competitive business environment.

To learn more about RISE with SAP on Google Cloud click here.