Democratising Algorithmic Trading Through a Cloud Strategy Based on Business Requirements

What is a Quant? They've been described as the rocket scientists of Wall Street and stock exchanges around the world. In short, Quants - or quantitative analysts, to give them their proper title - design and implement complex models to price and trade securities. You'll find them at the heart of investment banks and hedge funds working with traders, serving up pricing, and trading tools.

A Quant working for a hedge fund can expect a six-figure starting salary, making these positions highly sought after and creating a situation where demand for jobs outstrips supply. This is where Quantiacs, a fintech set up in 2014, comes in. “We're giving people the opportunity to be Quants - people who perhaps wouldn't normally get the chance to work for investment banks and hedge funds,” says Martin Froehler who is CEO and founder of Quantiacs. “There is an enormous pool of talent out there that investment banks or hedge funds never see. Our mission is to give these talented individuals the opportunity to become great Quants and to write great trading algorithms.”

An IT Infrastructure Fit for a Fintech

When Quantiacs launched, the company required an IT infrastructure that addressed several challenges. It needed a production environment that could connect to stock exchanges to run trading algorithms for institutional investors. The infrastructure had to be highly secure for compliance and regulatory reasons, with maximum uptime. But Quantiacs also needed a research environment for its aspiring Quants to access and build their trading algorithms. Here, neither regulatory demands nor uptimes were so stringent. The key parameters were cost and scalability.

Mixing Public and Private Cloud

To meet these challenges, Quantiacs has pursued a cloud strategy that includes public and private clouds - enabling the company to drive innovation while keeping data secure. Indeed, the company is one of many companies to adopt a mixed cloud approach in order to:

• Optimise workload placement while minimising outage risk and dependence on a single provider
• Benefit from multiple cloud-based services, including IaaS, PaaS and SaaS, and public, private, or hybrid-cloud solutions
• Choose workload placement based on real-time policies that reflect business priorities - without changing infrastructure

In the case of Quantiacs, it selected a private cloud to support its mission-critical production environment. “A private cloud met our legal and regulatory requirements, and gave us the redundancy to ensure high availability. Downtime in our production environment could be catastrophic,” says Froehler.

He continues, “We deployed our research environment on a public cloud. It didn't make business sense to run that as a private cloud because of the upfront capital costs. Our decision was based on scalability, ease of adoption, and, of course, cost.”

According to Froehler, the combination of private and public clouds gives Quantiacs the security, flexibility, and efficiency that his fintech needs. Plus, the strategy of using public and private clouds enables Quantiacs to satisfy its business requirements. “Quantiacs would not be possible without cloud IT - and mixed cloud deployments,” says Froehler.

Intel's Cloud Ecosystem

Intel is powering the deployments of public and private clouds for Quantiacs and FI's worldwide; our goal is enable interoperability of applications, so that regardless of public or private cloud development, solutions can be scaled across the ecosystem.

Some of the advantages provided by Intel are:

• State-of-the-art performance and security using Intel® Xeon® processors, network adapters, and Intel® Solid State Drives
• Seamless workload migrations between clouds using Intel's open-standards architecture
• Lower management costs through software developed by Intel partnering with leading ISVs as part of a cloud ecosystem

Froehler says, “Intel is providing the foundation on which private and public clouds are built. We believe that if companies like Intel continue to innovate and empower businesses like ours then we can continue, in turn, to improve our services to customers.”

Getting the Cloud Mix Right

When Froehler founded Quantiacs, he knew from day one that the company's IT would be cloud based. What's more, he had a cloud strategy in mind - choosing private or public clouds depending on the business requirements.

It's the Quantiacs of this world that are helping drive change in the financial services industry. And it's no coincidence that these fintechs are putting cloud IT at the heart of their operations. However, scratch the surface of many cloud infrastructures nowadays and you’ll see a mix of public and private clouds underneath - where private and public clouds run side by side and sometimes even mix.

For any financial institution that is unsure of the right cloud mix to pursue, help is at hand. Intel has teams of experts that can help financial institutions choose the cloud solutions that best meet their price and performance demands.

Visit intel.com/fsi to find out more.