The use of cloud technology in the capital markets is very rare, with only a few giants occasionally using cloud technology, but none of them replacing traditional infrastructure with cloud technology.。However, ADSS, a forex and CFD broker with extensive presence in the Middle East, has made a bold move to leverage the services of technology provider Adaptive to develop a proprietary trading platform based on cloud infrastructure rather than traditional data centers.。

Can the cloud go beyond traditional infrastructure?？

In the financial services industry, cloud-based infrastructure is relatively new。This type of infrastructure uses cloud services from tech giants like Amazon, Google, and Microsoft without the need to maintain physical data center infrastructure。

Matt Barrett, CEO and co-founder of Adaptive Financial Consulting, said: "The performance of cloud computing is more than enough for retail brokers that conduct price streams on their phones or web browsers.。No matter where they are in the world, they will not see delay differences。

"Obviously, price formation still occurs in physical data centers.。But cloud technology provides the ability to connect these data centers as well as pricing and connection infrastructure, which is very easy to achieve。"

He also stressed that with cloud-based infrastructure, "we don't run into resource constraints."。The cloud-based infrastructure is so flexible that "vendors and brokers can easily integrate their solutions."。

The need for a new platform

Adaptive is a software development company for the trading industry, not a white label solution provider。The intellectual property of the trading platform developed by the company is fully owned by the broker, which means that ADSS's new platform is proprietary to its。

ADSS already offers trading services using one of the most popular third-party platforms, MetaTrader 4。Now, in addition to MT4, the broker offers a proprietary "ADSS platform"。

According to Sophia Salim, CTO of ADSS, the broker developed the proprietary platform to overcome the limitations of MT4.。Salim said: "What we want is flexibility and scale.。We also want to be able to innovate and create customized experiences for our customers。Third-party off-the-shelf trading platforms struggle to achieve this flexibility。"

She further emphasized the outdated user experience of MT4, which is clearly behind the design capabilities of today's era。It is worth noting that MT4's company MetaQuotes Software has stopped issuing new licenses for the traditional MT4 trading platform and is currently vigorously promoting its modern successor platform MetaTrader 5.。Like Salim, Barrett agrees with the outdated nature of MT4.。

Salim added, "There is tremendous recognized value in optimizing the user experience for our traders, and of course, the flexibility that innovation brings to our customers.。However, ADSS has not yet decided whether it will only provide a proprietary platform or complement MT4 in the future.。We will continue to do what is good for our customers.。"

ADSS is not the first broker to take its own platform route and deviate from MetaTrader。Last year, Estonia-based Admirals launched its own trading platform, showing the trend of owning technology.。

Some popular brokers, such as eToro, Trading 212 and Plus500, only offer trading services on their own platforms。While some other big brands also offer services on their own platforms and third-party platforms, most brokers still rely on platform licensing.。

ADSS is a well-known brand in the field of retail forex and CFD trading。The broker, which is focused on the Middle East, pulled out of the UK market last year after abandoning a licence issued by the Financial Conduct Authority (FCA) to further focus on its core markets.。

Low cost but cost effective

Developing a trading platform is always more expensive than authorizing a third-party platform.。However, the former also has many advantages.。According to Salim, this is value and cost.。

"It's definitely cheaper to run an out-of-the-box solution," Salim said.。"But the key is the value customers get from it and the ability to drive economies of scale as there are more customers on the platform."。"

"On a cloud computing platform, many things can be solved, and it is easy to improve and reduce。Of course, there's also the reliability of the performance, and the acceleration you get from building on the cloud, in terms of the infrastructure you're using versus the customer infrastructure you have to build, "she added.。

When it comes to infrastructure costs, Barrett says, "You can't talk about cost without talking about value.。Cloud computing provides a much higher quality technology platform。He further emphasizes: "Things like elasticity, latency, performance, disaster recovery, replication sites, scalability, etc., all of which are more cost-effective in the cloud.。

Barrett said: "Traditional infrastructure costs more。"You have to operate two data centers, even if the second data center does nothing.。Cloud computing doesn't need to do that.。"

Security is a challenge

Despite all the promises, cloud-based infrastructure is a new thing in the capital markets, with its own set of challenges。

According to Barrett, one of the big challenges is "cybersecurity."。He explained: "We have found over the years that reality is as important as perception when it comes to cybersecurity.。For the past five or six years, some companies have chosen not to build platforms on the cloud because they believe there are security issues, but that is now changing. "。

"The perception of cloud cybersecurity is one of the challenges we believe needs to be addressed."。

Cooperation in the development of new technologies

Cloud-based infrastructure is still rare in the financial services industry, and according to Adaptive, it may be the only technology provider in the financial services space that offers cloud-centric services.。With such limited use of cloud technology, the process of developing a cloud trading platform between ADSS and Adaptive is very interesting.。

Barrett said: "The partnership between Adaptive and ADSS began in mid-to-late 2020.。As a provider of services to customers, you clearly want to help them achieve their vision。"

According to a case study conducted by Salim, the broker's goal for the new trading platform is "24 / 7 high availability, engaging and intuitive user interface on mobile and web, and support for high traffic."。Adaptive cloud-based solutions achieve all of these goals。

"ADSS is going to build a market-leading and market-defined platform, and you can't do that on a non-differentiated technology," Barrett said.。"The cloud is part of the solution。

"In the course of our cooperation, we have to be very flexible and open to change and direction on behalf of ADSS.。At each point, we did this in a very open way - we introduced ADSS to the development methodology and team pattern。We strive to facilitate as many points of contact as possible between the two organizations. "。

Shift to Cloud Technology

Although cloud-based technology is still new in the capital markets, Barrett predicts that in the next five to ten years, it will replace traditional infrastructure.。

"We are seeing a broader shift across the industry beyond retail brokerage.。In the institutional market, large centralized exchanges, such as the Chicago Mercantile Exchange (CME) and NASDAQ, have announced significant cloud partnerships over the past three to four years, "he added.。

Referring to traditional technology players in the trading industry, Barrett said: "If a broker is now doing business with MT4 or MT5, then in a sense it is limiting its own ambitions.。Some companies can be profitable without differentiated technology, but they differentiate through existing relationships, regional franchises, or other aspects of the business。"