Finance

HYPERCONVERGED INFRASTRUCTURE (HCI) – DRIVING DIGITAL TRANSFORMATION ACROSS THE FINANCIAL SERVICES SECTOR (PART 1)

By: Alan Conboy, Office of the CTO, Scale Computing

There is a technology gaining rapid interest across the financial services industry: Hyperconverged Infrastructure (HCI). This is a software-defined solution that enables seamless connection of systems, bulletproof protection of data, and significant increases in agility, as well as an overall reduction of all associated costs. With all that to offer, it is no surprise that the financial services industry, and building societies in particular, are looking at HCI as a key part of their digital transformation strategies.

As billions of smart devices spread across the planet, each with the ability to connect, communicate, share, and analyse data, it is no surprise that, along with virtually every other sector, IoT offers the financial services sector a truly unique opportunity to transform IT and business processes, and deliver greater value and experiences to customers (CX).

Alan Conboy

With IoT, not only can customers access their finances, as well as financial information and applications in real-time, from anywhere at anytime, but banks can better view, manage, control and protect all of their customers’ data. Moreover, that customer data can then be analysed and leveraged to create and deliver solutions and services specifically tailored to meet current and emerging customer wants and needs, which in turn drives increases in customer loyalty, revenues, profits and the bottom-line, as well as shareholder value.

Similarly, edge computing is spurring otherwise unattainable advances, enabling financial services organisations to decentralise the workload, and to collect and process data at the edge or nearest to where the work is actually occurring, which can overcome the “last mile” latency issues. In addition to reducing complexity and enabling easier collection and initial analysing of data in real time.

Along with other financial institutions, building societies can deploy edge data centers that can also be leveraged to offload processing work near end users, acting as an intermediary between the IoT edge devices and larger enterprises hosting the high-end compute resources, for a more in-depth processing and analytics. However, many financial organisations have faced a number of challenges as they have endeavored to deploy, manage and reap the benefits of IoT and edge computing. And, that’s where hyperconvergence can make all of the difference.

However, the common misuse and misunderstanding of the term hyperconvergence has led to confusion and continues to serve as a barrier for those that could otherwise benefit immensely from an IT, business agility, and profitability standpoint. Let’s try to clear up that confusion here.

Say goodbye to the inverted pyramid of doom

Before hyperconverged infrastructure, there was the inverted pyramid of doom. This refers to a 3-2-1 model of system architecture. And, while it can get the job done in a few key areas, it is the polar opposite of what a businesses truly want or need today.

The 3-2-1 model is a scenario where there are virtualisation servers or virtual machines (VMs) running three or more clustered host servers, connected by two network switches, backed by a single storage device – most often, a storage area network (SAN). The issue here is that the virtualisation host relies totally on the network, which in turn relies totally on the single SAN. To say it another way, everything rests upon a single point of failure – the SAN.

Welcome to hyperconverged

Reduction in cost is only one of the benefits of hyperconverged infrastructure. By utilising a native hypervisor, the storage can be architected and embedded directly with the hypervisor, eliminating inefficient storage protocols, file systems, and VSAs. The most efficient data paths allow direct access between the VM and the storage; this has only been achieved when the hypervisor vendor is the same as the storage vendor. When the vendor owns the components, it can design the hypervisor and storage to directly interact, resulting in a huge increase in efficiency and performance.

On top of storage efficiency, having the hypervisor included natively in the solution eliminates another vendor which increases management efficiency. A single vendor that provides the servers, storage, and hypervisor makes the overall solution much easier to support, update, patch, and manage without the traditional compatibility issues and vendor finger-pointing. Ease of management represents a significant savings in both time and training from the IT budget.

HCI: the silver lining to every cloud

The cloud and its benefits are well established, and most financial organisations have already leveraged it, whether from an on-premises, remote or public cloud platform, or more commonly a combination of each (i.e. hybrid-cloud).

Hyperconverged infrastructure, as a fully functional virtualisation platform, can nearly always be implemented alongside other infrastructure solutions, as well as integrated with cloud computing. For example, with nested virtualisation in cloud platforms, a hyperconverged infrastructure solution can be extended into the cloud for a unified management experience.

Like cloud computing, a hyperconverged infrastructure is so easy to manage that it enables IT administrators to focus on apps and workloads, rather than be tied down managing infrastructure all day as is common in 3-2-1. A hyperconverged infrastructure is not only fast and easy to implement, but it can be scaled out rapidly when needed. A hyperconverged infrastructure should absolutely be considered along with cloud computing for any data center modernisation.

Finance

WILL BLOCKCHAIN REVOLUTIONIZE FINANCE?

By Ken Timsit, ConsenSys

Over the last 10 years, researchers, software developers, start-ups, and large companies have been conducting experiments aimed at determining whether networks based on blockchain technology can ultimately – in whole or in part – replace the infrastructure on which financial institutions and capital markets are built.

In today’s electronic databases, any information can theoretically be replicated at will. This is why most governments allow only regulated actors to keep records of digitized assets (banks, depositories), to avoid pitfalls such as the execution of misleading transactions or the creation of artificial assets. With blockchain, these pitfalls can be avoided at the source code of the technology, which is available to all members of the network. The creation of Ethereum enabled a more robust blockchain network capable of “smart contracts”, which once programmed, can run automatically without the results being modified or manipulated.

Contrary to what some critics argue, the potential of the blockchain is not the creation of a free and unregulated space in which everyone can invent new financial instruments. Rather, the potential lies in creating a much more efficient and globalized commercial and financial infrastructure, in which many layers of control and intermediation are no longer needed as they are replaced by transparent and immutable IT rules that ensure the same risk management functions.

For example, bonds are essential financial instruments on which a large part of our economy and savings are based. The issue and exchange of a bond requires the intervention of several dozen financial institutions (issuers, intermediaries and investors). Some regulated players in this intermediary chain exist mainly to ensure that it is possible to know, at any time, who holds each bond, in order to guarantee their rights to its bearers.

It is theoretically possible to simplify these stacks of operators by linking them to a global blockchain network, open to all stakeholders in the industry. The blockchain network can thus ensure at any time that the number of outstanding bonds corresponds exactly to the number of bonds issued, and that each exchange transaction is carried out without the risk of default.

The blockchain revolution is first and foremost the reduction of costs and delays caused by the current financial infrastructure. The blockchain revolution also creates innovation opportunities for consumers, savers, and investors.

The Web3 revolution, often used to refer to the blockchain revolution, will be driven by the reduction in transaction costs, allowing the emergence of new peer-to-peer business models that we are not yet able to accurately predict, but which will probably participate in a rebalancing of the relationships between financial institutions and their clients. Some international peer-to-peer payment and loan-to-peer savings investment models are already attracting increasing interest from the most sophisticated consumers.

Where are we in 2020?

Today, the blockchain revolution is still in its infancy. Transaction volumes through blockchain networks, public and private, are low compared to those of existing systems. The fixed costs of the technology are still relatively high, and the user experience leaves something to be desired.

However, innovations abound. It is already possible for me, from my smartphone, to buy digital assets whose value is equal to about one US dollar, and to lend them in three clicks to other users who will pay me between 1% and 10% per year for this service, depending on the type of platform.

The number of large operational business projects is still small, but very promising. Numerous international commodity trading players have joined forces to create Vakt and komgo, two platforms that contribute to a significant simplification of trade and oil financing. Similar and competing projects, Voltron and Marco Polo, are being launched. On the corporate side, the Capbridge 1x platform (Singapore) already allows shares to be traded on an Ethereum blockchain network. Other important projects such as LiquidShare (France), SIX Digital Exchange (Switzerland), Daura (with Deutsche Borse and Swisscom in Switzerland), Synapse (Hong Kong Stock Exchange) are in preparation. The World Bank, Société Générale and Santander have issued bonds on an Ethereum blockchain network. These initiatives are still experimental but have attracted significant interest from financial institutions around the world.

And of course, many projects aim to revolutionize global payments by creating digital assets on blockchain networks that are fixed in Euros, U.S. Dollars or other currencies, such as those of the Monetary Authority of Singapore, the South African Reserve Bank, and Union Bank of the Philippines. Since the announcement of the Facebook-initiated Libra project, many governments have expressed concern about the possibility of private companies controlling global payment flows, and have asked their domestic financial institutions to redouble their efforts to explore competing initiatives.

All of this is to say that adoption is happening, albeit gradually. The middlemen and intermediaries of the financial world will not be replaced overnight. Moreover, the exact formation or architecture of the new financial system is impossible to predict with accuracy. However, it’s safe to say that blockchain will enable a financial system that is more efficient and yields more value-add to consumers, users, and investors.

Finance

RECOLLECTING 2019 CRYPTOCURRENCY TRENDS & LOOKING FORWARD TO 2020

Marie Tatibouet is the CMO at Gate.io

It has been a bold and progressive year for the digital asset market with exciting announcements flowing in from technology behemoths and government bodies around the world. However, Facebook’s launch announcement of Libra (though they are now facing regulatory issues) and China’s new cryptocurrency law caught all the attention, affecting the Bitcoin price, and the overall market sentiment.

In 2019, the global market saw several catalysts emerging for mainstream adoption despite increased scrutiny around several burning issues such as wash trading and security breaches. For over 400 cryptocurrency exchanges in the world, being able to constantly improve on aspects around user experience and fund security is the only way to be sustainable. However, only a handful have real trading volume and technical expertise to build strong trust in the community. For instance, global wash trading has been the hottest topic of discussion in 2019 but new rankings on CoinMarketCap clearly indicate that the industry is working towards eliminating market manipulation.

Looking back at 2019

In 2019, digital asset organisations have constantly innovated to attract users but at the same time, the trading process has become increasingly fragmented, spiking the time gap between new users becoming long-term users.

Marie Tatibouet

Holding & Lending Funds

Since 2014, the Bitcoin margin trading market has expanded from $10 million to $100 billion. Margin trading has been a great use case in the cryptocurrency space. Many exchanges launched the feature to provide diversity to the trading experience and attracting a huge amount of users to the platforms. It allows traders to multiply their profits on successful trades, providing a range of possibilities for both profits and losses.

Staking is a process where users can buy digital assets and earn interest by keeping (holding) them in a cryptocurrency wallet for a particular period of time. It has proved to be a strong use case for digital asset companies as it encourages user participation. In 2019, staking programs brought stable earnings for cryptocurrency investments made by the users. For instance, HODL & Earn launched by Gate.io in August 2019 has been bringing stable earnings for cryptocurrency investments made by its users. The competitive advantage for HODL & Earn is its annual interest rate, which is as high as 32%.

IEO

Crowdfunding as an approach to build and grow products has seen a lot of traction over the last decade or so. One of the highlights this year was the emergence of “Initial Exchanges Offerings”, more commonly termed as IEOs, an alternative to traditional IPOs where companies can raise funds by selling a quantity of digital assets to investors, supervised by cryptocurrency exchanges. With over 1.5 Billion funds raised, IEOs shook the entire cryptocurrency space in 2019.

Owing to the richness and variability that we have seen so far, there has been no one clear winner to pick, but there’s also no ignoring the leaders; Gate.io has the second best average IEO returns, raising over 80 million dollars in its first 5 projects and has similar offerings panned out for 2020.

Source: https://medium.com/@neironix.io/top-8-largest-ieo-whats-happening-to-them-now-f7e60a638dda

Deals and Discounts

Discount deals are being increasingly leveraged by digital asset companies, encouraging users to maximize their capital. Holiday seasons such as Black Friday are packed with jaw-dropping discounts. However, as an industry, we should aim to integrate discounts in digital currencies into the mainstream world, which would bring price stability.

Dynamic User Relationship

Cryptocurrencies are being taken seriously and companies are designing consumer-specific strategies. It is a great indication of the fact that more and more people are interested in trading digital assets. However, we have a long way to go when it comes to tackling the industry challenges and unlocking value for the entire ecosystem.

Regulation, Security, and Mass Adoption

Central banks of the US, Europe, China, and Ghana are looking at creating their own central bank digital currencies, putting a structure to the adoption of the blockchain technology across finance and other industry verticals. Japan’s recent regulation amendments, China’s new crypto law have laid the right frameworks for mainstream crypto adoption.

While we have major countries pushing for the mainstream adoption, security remains a major concern. Cryptocurrency thefts and frauds in Q3, 2019 annual stand at USD 4.4 billion and this will only increase if fund safety mechanisms aren’t strengthened. Therefore, the strongest will survive as far as digital asset security is concerned.

Nonetheless, blockchain technology is helping to create an innovative and accessible financial system around the world and its mainstream adoption is closer than we can fathom.