Imperium Financial Group, a commodities broker and wealth manager based in Hong Kong, has replaced its own servers with Alibaba’s cloud.
“Previously we had to run a big room to house some 20 servers,” said Eric Wong, the broker’s chief technology officer. Maintaining the hardware was labor-intensive and expensive, he said.
Imperium moved to cloud to solve two problems.
First, the broker had to manage its own cyber-security. Precious-metals trading is Imperium’s main business. The firm is a
Such attacks can incapacitate firms’ ability to execute trades for hours. Cloud providers pour huge resources into protecting their clients, far more than most financial institutions could afford.
Since moving to Alibaba Cloud, Imperium’s web server is now up 99% of the time, Wong says.
Michael Dai, senior solution architect at Alibaba Cloud, says his firm is protecting over 40% websites across China and has prevented 50% of large-scale DDoS attacks in China. He says the company’s defence rate is nearly 100%. “People might feel that a public cloud is riskier, but the truth is the opposite,”
Imperium employs about 500 people, and operates in three markets: Hong Kong, Australia and mainland China.
Wong says the second benefit of moving to the cloud is speed. Customers in mainland China and Australia previously suffered due to distance from Imperium’s servers in Hong Kong. The broker operated a MetaTrader forex trading platform whose latency depended on the client’s location.
Alibaba offers services called content delivery network (CDN) and cloud enterprise network (CEN).
CDN delivers information from its nodes closest to where users sit, say from Alibaba’s data centre in Sydney or Hangzhou; CEN involves transactions among alibaba’s hubs of data on the cloud, which makes real-time trading more reliable.
This tech upgrade supports Imperium’s’ expansion plans for North America and Europe, Wong says.
Brokers operating in, or trading, mainland Chinese and Hong Kong equities began to look for operational alternatives in 2015. That year saw Chinese stocks boom – and then bust. Many mainland and Hong Kong brokers were unprepared for the huge swings in volume, and many systems failed.
Brokers often responded by setting up extra servers to accommodate peak demand. But this proved costly, as most of the time the servers are idle, but still cost money to maintain. Those charges were also being passed on to clients, making brokers less competitive – but not having the capacity to meet client needs in times of stress would not only hurt business but could lead to lawsuits.
Given initial concerns about data protection, financial institutions began dabbling with hybrid clouds, using a vendor to process computations in peak seasons with historical or market data, but relying on internal, or “on-prem” servers, usually warehoused in a data center, to compute sensitive data.
“You can book (elastic computing service) by the day or by the hour,” said Leo Liu, general manager of Alibaba Cloud in Hong Kong, Macau and Korea.
The early movers of hybrid databases were in businesses like retail consumption: Alibaba’s Tmall processed Rmb213.5 billion ($31.5 billion) of revenue on the single “double 11” shopping day (November 11).
Banks and brokers have been slower to adopt cloud because of regulation and reputation. But some firms, like Imperium, have decided cloud servers can meet these challenges.
Larry Xiao, general manager of security at Alibaba Cloud, says all customer data is encrypted on the cloud. Neither Alibaba nor a hacker can access the data. Although Alibaba is a Chinese company, it complies with international regulations such as Europe’s GDPR for data privacy; it submits to independent audits.
Imperium will need to prove it is in compliance with such rules if it wants to expand into European or American markets. By outsourcing the work to a cloud provider, which already invests in meeting regulation worldwide, brokers don’t have to worry about meeting these standards themselves.
Alibaba Cloud says it is now in the top three globally, with Amazon Web Services and Microsoft Azure. In 2018 the company reported revenues of $825 million, a 90% increase year on year.