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Domino and AWS: collaborative analytics and model governance at financial services firms

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Domino and AWS: collaborative analytics and model governance at financial services firms

  1. 1. Domino and AWS: Collaborative Analytics and Model Governance at Financial Services Firms
  2. 2. Introduction Financial Services Industry • Highly regulated • Broad range of firm sizes, from small hedge funds to global money center banks • Large amount of analytical work related to transactions (e.g. mergers and acquisitions, securitizations, equity IPOs) • Subscribers to multiple data vendors • Historically have been massive consumers of technology Technical Challenges • Large amounts of legacy analytics • Subject matter experts technically proficient, but not software engineers • Collaborative analytics between front office desks, risk departments and back office can get complex • Desktop environment and version management creates challenges for reproducibility and collaboration • Multiple version control file storage and database systems • Spreadsheets and shared drives that never stop growing
  3. 3. Financial Service Industry Analytics Common Tasks • Building predictive risk models • Validating the predictive models (often by a different group) • Derivative pricing • Constructing and back testing algorithmic trading strategies • Credit risk stress testing • Transaction analytics • Reconciliation / tie-out • Data driven research
  4. 4. Financial Service Industry Analytics Typical quantitative developer profile • Masters/pHd in math, physics or statistics • Deep subject matter expertise in a rather narrow specialty • Often build and support their own analytical stack. An example: • High powered local machine • Sas, R, Matlab, SPSS • C++ • SQL • Excel, csv • Maintain large libraries themselves • Some (not all) can be a bit reluctant to adopt new technologies into their stack
  5. 5. DBRS Overview DBRS is an internationally recognized credit rating agency that has been providing issuers, regulators, investors and intermediaries with objective, transparent, insightful risk analysis and opinion since 1976. DBRS rates entities in: Argentina Australia Austria Barbados Belgium Brazil Canada Cayman Islands Chile China Colombia Cyprus Denmark Finland France Germany Greece India Ireland Italy Japan Luxembourg Malta Mexico Netherlands New Zealand Norway Peru Portugal Spain Sweden Switzerland Turkey UK USA Uruguay DBRS employs approximately 440 professionals around the world, with offices in New York, Chicago, Toronto, London and Mexico City. Public Finance (includes Sovereigns) – 39% Corporates – 6% Financial Institutions & Insurance – 26% Structured Finance – 29% Coverage by Industry DBRS Overview
  6. 6. DBRS & Domino Securitization Analysis Example – Residential Mortgage Backed Security Investment Decision Predictive Analytics Train/test regression model on large historical mortgage data set Transaction Analytics For a given default & interest rate scenario, forecast the interest and principal paid to the bonds Qualitative Analysis Legal documentation review (true sale, events of default) Traditional data science (R, Python) Fixed income analysis (Excel, VBA, Python) Human group decision making (Word, PowerPoint, Email)
  7. 7. DBRS & Domino Traditional Approach Modern Approach Data exploration / wrangling • Excel Scripting • VBA Technical computing • Stata, Matlab, R Storage • Shared drive, SQL Server Model engines • C#, VBA Front end • Excel add-ins Presentation • Powerpoint Data exploration / wrangling • Jupyter notebooks Scripting • Python Technical computing • Python (numpy, pandas, sci-kit), R Storage • S3, Athena, Domino projects Model engines • Python Front end • Excel add-ins, R Shiny Presentation • Plotly, Jupyter notebooks, Powerpoint* *Still can’t escape it
  8. 8. DBRS & Domino Model Governance Example Development • Parameter estimation performed in Jupyter notebooks, which are easily shared with the model review team • Excel add-in which allows developers dump transaction data to json files, Domino via REST API, or S3 bucket • Developer codes locally with their IDE, using json files to debug • Code changes reviewed and approved via GitHub • Domino project automatically synced to the repo • Developer can easily setup the correct environment for their project inside of Domino Advantages • Analysts interact with Excel/R Shiny front end as they normally would, the code is all executed server side on Domino • Analyst workflow is auditable in the form of a Domino run, which is a record of the code version, inputs, outputs and environment • Scalable via AWS, large batch jobs are easily scheduled • Developers can control their code base by hosting it server side without any knowledge of web technology, Docker containers, etc. • Development can still be very rapid & flexible
  9. 9. AWS Global Infrastructure 16 Regions – 42 Availability Zones – 76 Edge Locations Region & Number of Availability Zones AWS GovCloud (2) EU Ireland (3) US West Frankfurt (2) Oregon (3) London (2) Northern California (3) Asia Pacific US East Singapore (2) N. Virginia (5), Ohio (3) Sydney (3), Tokyo (3), Seoul (2), Mumbai (2) Canada Central (2) China Beijing (2) South America São Paulo (3) Announced Regions Paris, Ningxia, Stockholm Over 2 million active customers across 190 countries 2,300+ Government Agencies 7,000+ Educational Institutions 1,000+ Financial Services Organizations © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
  10. 10. Right Now in Asset Management... …a top 5 asset manager is consolidating data centers, with a plan to move 400 workloads (5,000 servers) in 2 years to AWS. ...that same industry-leading firm is shuttering its internal private cloud. ...2 of the top 10 asset managers in the world are moving “all in” to AWS. ...and migrating its order routing system off of mainframe to AWS. ...leading providers of solutions to the industry are migrating those applications to AWS. © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
  11. 11. FS enterprises are using AWS to transform BANKING & PAYMENTS INSURANCECAPITAL MARKETS Capital One
  12. 12. “For our market surveillance systems, we are looking at about 40% [savings with AWS], but the real benefits are the business benefits: We can do things that we physically weren’t able to do before, and that is priceless. ” RIGHT NOW: FINRA is using Amazon S3 and EMR to Power Market Surveillance FINRA is the largest independent regulator for all securities firms doing business in the US. FINRA oversees about 4,250 brokerage firms, about 162,155 branch offices and approximately 629,525 registered securities representatives. - Steve Randich, CIO, FINRA What FINRA needed: • Infrastructure for its market surveillance platform • Analysis and storage of approximately 35 billion market events every day • Interactively query multi-petabyte data sets Why they chose AWS: • Fulfillment of FINRA’s security requirements • Ability to create a flexible platform using dynamic clusters (Hadoop, Hive, and HBase), Amazon EMR, and Amazon S3 Benefits realized: • Increased agility, speed, and cost savings • Estimated savings of $20m annually by using AWS © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
  13. 13. “Nasdaq has been a user of Amazon Redshift since it was released and we are extremely happy with it. Currently, our system is moving an average of 5.5 billion rows into Amazon Redshift every day.” ” RIGHT NOW: Nasdaq is Using Amazon Redshift to Power Data Analytics Nasdaq is the 2nd largest exchange group in the world by market capitalization. Nasdaq operates one of the world’s largest networks of exchanges, which spans 26 markets, 1 clearing house, and 5 central securities depositories. Its markets trade multiple asset classes including equities, options, futures, fixed-income, commodities, derivatives and structured products. - Nate Sammons, Principal Architect, Nasdaq What Nasdaq needed: • Replacement of on-premise legacy warehouses • Reduction of cost and increase in data capacity Why they chose AWS and Amazon Redshift: • Fulfillment of security and regulatory requirements • Cost efficiencies without sacrificing functionalities Benefits realized: • System that moves an average of 5.5 billion rows into Amazon Redshift every day (with 14 billion on a peak day in Oct of 2014) • Ability to increase accessibility of historic data to a growing number of internal groups © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
  14. 14. AWS in Capital Markets Broadridge has launched a technology platform on AWS named Inlet to make it easier for companies to provide millions of consumers access to their most important documents from hundreds of providers in just a few clicks. Broadridge uses Inlet to deliver investment industry content for its financial institution customers. Global Investor Communications Robinhood is a U.S. based financial services company founded in 2013 that runs its entire broker-dealer on AWS. The Robinhood app allows individuals to invest in publicly traded companies and exchange-traded funds listed on U.S. exchanges without paying a commission. $0 Commission Trading Trading Technologies, a leading global provider of a derivatives trading platform to the financial services industry, has built their next-generation trading platform using a hybrid architecture, with its backbone built on AWS spanning all publicly available AWS regions which are connected to co-located infrastructure at global exchanges. Global Trading Solutions This global exchange group has migrated its entire historical data footprint to AWS, as well as an industry-leading messaging application, and a web-based trading platform. Global Exchange Group In order to achieve greater resource scalability, St. James’s Place has migrated 85% of its applications to AWS and expects a full migration by the end of 2016. UK Wealth Management TickerTags uses AWS to maintain a curated taxonomy of over 300,000 tagged products, brands, competitors, topics, affiliated people, places, regulatory threats, etc. Tags serve to bridge and filter immense volumes of unstructured data for market insight. Social Sentiment © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
  15. 15. Conclusions Domino & AWS • There is a large population of analysts who are “part time” data scientists, and are not using the optimal technology stack. Collaborative analytical solutions enable them to get up to speed rapidly and help reduce silos • Domino provides easy access to AWS, git, docker containers, and REST API’s for non-software engineers • There is strong momentum for AWS, not only for large firms but small ones as well • While the modular nature of the Python/R ecosystems provide many benefits, one must be cautious of environment, especially package management • Subject matter experts should focus on business logic & model design, let somebody else do the plumbing!

Notas del editor

  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations
  • TALKING POINTS:

    WE SPEND A LOT OF TIME TALKING TO OUR FSI CUSTOMERS AROUND THE WORLD. OUR CUSTOMERS TELL US:

    REGULATORY COMPLIANCE CONTINUES TO BE A SIGNIFICANT EXPENSE DRIVER, AS REGULATORY OVERSIGHT CONTINUES TO EXPAND
    COMPETITION – FROM NEW FINTECH ENTRANTS AND TRADITIONAL PLAYERS – IS AT AN ALL TIME HIGH; FINANCIAL CONSUMERS HAVE MORE CHOICE NOW THAN AT ANY OTHER TIME IN HISTORY
    SECURITY IS JOB ZERO FOR FSI FIRMS
    FIRMS ARE SITTING ON PETABYTES OF DATA – EITHER FOR COMPLIANCE PURPOSES OR BECAUSE THEY THINK THAT IF THEY CAN MINE THAT DATA, THEY’LL BE ABLE TO IDENTIFY ACTIONABLE INFORMATION
    CLOUD IS THE NEW NORMAL
    RESOURCES ARE SCARCE. AS MORE AND MORE ENTERPRISES MAKE THE MOVE TO THE CLOUD, FINDING THE RIGHT PEOPLE TO HELP YOU DRIVE THIS CHANGE IS IMPORTANT, ESPECIALLY IN LIGHT OF SHRINKING BUDGETS AND DECLINING REVENUES
  • AWS serves hundreds of thousands of customers in more than 190 countries.

    Amazon CloudFront and Amazon Route 53 services are offered at AWS Edge Locations

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