" class="no-js "lang="en-US"> EXCLUSIVE: "Above and beyond" – Ashok Kalyanswamy, Saxo Bank in ‘The Fintech Magazine’
Wednesday, May 22, 2024

EXCLUSIVE: “Above and beyond” – Ashok Kalyanswamy, Saxo Bank in ‘The Fintech Magazine’

When the pandemic prompted a huge uplift in demand for digital trading services, Saxo Bank responded by cranking up the Cloud migration that was already underway. Group CIO, Ashok Kalyanswamy, gives an insight into the journey  Ashok Kalyanswamy, Saxo Bank | Fintech Finance

IT teams within established financial institutions (FIs) often find themselves managing the tensions between sunk costs in legacy hardware and improved functionality offered by the latest shiny new thing as they strive to ensure the tech stack runs smoothly. The outcome of that conflict makes itself felt across the organisation. Business units – and, ultimately, the FI’s users – rely increasingly on super-fast databases to help process decisions and information flows.

A capable and up-to-date tech stack isn’t just the IT teams’ concern, then: it affects how other departments can expand the portfolio of products and solutions they make available. But what if the build cost of such a system is so great, and the speed of progress so fast, that it’s outdated before the organisation can see a return on investment? How can existing institutions offer the quality that customers expect without spending millions overhauling their infrastructure?

The online trading and investment specialist Saxo Bank decided that the way to avoid facing both those issues was by beginning a journey to the Cloud in 2018.

“Cloud enables scale, volume, processing, and computer power,” says Ashok Kalyanswamy, group CIO at Saxo Bank. “It’s like being in a shopping mall – suddenly, there’s a whole bunch of services you don’t have to build yourself; they’re available in the Cloud, as software-as-a-service, which you can use to augment and drive information and decision-making.”

Two years after Saxo Bank announced that it was moving its entire tech stack to Microsoft Azure to speed up its digital transition, the events of 2020 prompted a record number of investor clients to join the bank, which is best known for its award-winning SaxoTraderGO platform, a complex and feature-rich application offering a unified web, mobile and desktop trading front-end. It became very clear that on-demand scalability was non-negotiable and validated Saxo’s decision to begin the transition to the Cloud back in 2018.

It’s significant that, under those pressures, it became the first (and so far only) bank to achieve the highest Security, Trust & Assurance Registry (STAR) grade available from the Cloud Security Alliance (CSA) for its management protocols and procedures. So, what has this progressive new approach to its tech stack allowed Saxo Bank to achieve?

“A tremendous amount of organisational agility,” says Kalyanswamy. “And that’s because, suddenly, people don’t have to make large copies of data to then go away and do their own thing. You can have virtual teams, working with their own view of good, clean data, in parallel. You can spin off, you can orchestrate, and you don’t have to worry about ordering servers, and being locked into a hardware.”

Organisational agility is something that may be greeted with a groan of despair in ever achieving it. Updating a user’s system is one thing, but ensuring that any updates run smoothly with infrastructure elsewhere, especially in large financial institutions, can be a real chore. That’s why successfully adopting a Cloud approach requires the organisation to undertake some serious groundwork. Saxo Bank, for example, spent a year building what it describes as its own ‘Cloud Foundation’, featuring around 77 critical controls to ensure that criteria around the governance, technology, legal and operational framework were all met.

Kalyanswamy believes that by keeping everyone in the organisation on the same diversified infrastructure but at the same time staying consistent within this well-defined framework, users don’t have to suffer from reduced interoperability or challenging inconsistency.

“Cloud enables autonomy for different application teams, which is super-important, but it has to be managed in a way that everybody doesn’t go off the reservation,” he says.

Implemented with a solid foundation, Cloud allows organisations to facilitate ‘autonomous teams, but with the consistency of use, a methodology, and a platform, that lets people scale in many, many dimensions and deliver value faster’, according to Kalyanswamy. And what of organisations that don’t have the capacity to undertake a Cloud migration as ambitious as Saxo Bank’s? Well, the good news is that there is a neat way to build up similar capability,

“A big part of our business is also partnerships and white labels, because we have an open API itself as a product,” explains Kalyanswamy.

For smaller or regional players without the means to assemble their own complex infrastructure, licences and technology to support trading and investment services, the Saxo Bank white-label proposition is an obvious way to achieve the same ends at a fraction of the effort and expense.

“To get licences and technology in place costs a lot of money and takes a lot of time, but by white-labelling, they can own the user journey and use APIs behind the scenes,” says Kalyanswamy. “The Saxo API also offers various other insights and services around AI and translation… it’s available in the Cloud, as software-as-a-service, which you can use it to augment and drive information and decision-making.”

Now three years into Saxo’s journey to the Cloud, Kalyanswamy is curious to see how the accelerated speed of queries and visibility of data that it enables across the organisation – and, indeed, between organisations – plays out.

“‘People say, data is the lifeblood of digital. But how about the cleanliness of data? And who defines what good looks like?” he asks. “I’m really interested to see how Cloud-based technology can maybe enable institutions of various different geographies and sizes to connect disparate systems to prevent the rubbish in, and rubbish out scenario.”

That’s likely to determine which banks excel, and which fall behind in an intensely fast and competitive trading landscape, in which the most successful participants are really only worth what they know – and it’s down to players like Saxo to tell them.

“There’s no point giving yesterday’s news of the markets to traders today. You need to help them make trading or investment decisions in real time, based on news feeds, Twitter feeds, etc,” says Kalyanswamy. “Similarly, it’s helpful to know what your client’s interests are, what they trade and what they could be interested in trading.”

Choose your own Cloud

In this environment, the beauty of using Cloud solutions, is that it doesn’t have to be a case of one-size-fits-all, believes Kalyanswamy. An organisation with existing strengths in its software portfolio, or with particularly esoteric demands in one specific area that a white-label solutionis unable to cover, can easily cherry-pick what to adopt.

“Almost like choosing off a menu, you can say ‘I want this service, this service and this service’ and glue them together with a well-defined API, which you can then integrate and merge to provide more services,” Kalyanswamy suggests.

All of this is particularly important in the context of what’s happening to capital markets, where the speed of change means products and consumer solutions need to be more readily updated than ever before.

“Things are going to evolve much faster yet,” says Kalyanswamy. “So, to keep up with technology in order to benefit the customer, you need to stand on the shoulders of giants.”

The Saxo model has allowed the bank to deliver speed at the core of its product proposition. New Cloud-streaming servers can be spun up in Kubernetes in under 10 seconds, allowing the investment platform infrastructure to scale on-demand, almost instantaneously.

For organisations considering a similar approach, it’s worth considering what this has allowed Saxo Bank to achieve. It took 25 years for it to reach the DKK 100 billion milestone; over the past four years it’s added an additional DKK 500 billion in clients’ assets. Only time will tell how far much further Saxo Bank’s journey to the Cloud will take it.


This article was published in The Fintech Magazine #22, Page 21-22

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