Key Highlights:
- In a collaboration with Amazon’s cloud business, the bank is providing hedge funds and asset managers with access to its vast collection of market data and software tools.
- The new solution, GS Financial Cloud for Data with Amazon Web Services, will save asset managers time by allowing their coders to concentrate on trading.
- The product, which was presented at the AWS re:Invent conference in Las Vegas, is the latest example of the internet giant’s exceptionally close relationship with the premier Wall Street business.
Goldman Sachs is entering the cloud computing market.
In a collaboration with Amazon’s cloud business, the bank is providing hedge funds and asset managers with access to its vast collection of market data and software tools.
According to officials at the two organizations, the move, the product of a two-year partnership with AWS, places the 152-year-old Goldman in the uncommon position of being a supplier of cloud services for Wall Street. It’s part of Goldman CEO David Solomon’s ambition to leverage technology to better serve the firm’s markets division’s customers, a trading behemoth that has helped propel the firm’s profits this year.
According to the firms, the new service named GS Financial Cloud for Data with Amazon Web Services would assist asset managers to save time by allowing their engineers to focus on trades rather than wrangling data sets and relying on a patchwork of outdated technologies to analyze them. According to Goldman, it will also “reduce the hurdles to entry” for businesses to adopt advanced quantitative trading techniques.
According to Goldman co-chief information officer Marco Argenti, the sector is trying to keep up with the expanding technology needs of the latest investing approaches. Over the previous decade, quantitative trading firms have absorbed assets while conventional hedge fund managers such as John Paulson and Leon Cooperman have closed to outside investors.
Working Backwards
The product, which was presented at the AWS re:Invent conference in Las Vegas, is the latest example of the internet giant’s exceptionally close relationship with the premier Wall Street business.
According to Adam Selipsky, who rejoined Amazon as CEO of AWS early this year, the partnership began more than a decade ago when Goldman began to migrate elements of its processing business to the cloud.
Goldman relied on AWS to swiftly create its Marcus consumer lending company in 2016 and its Apple Card operations three years later. Meanwhile, Goldman Sachs provides loans to Amazon retailers and advised Amazon on its acquisition of Whole Foods in 2017.
During conversations between the two corporations, Goldman was interested in learning how Amazon took computer capabilities it had developed for itself and converted them into AWS. Amazon taught Goldman a practice known as “working backwards,” in which the tech giant publishes a press release and FAQ before beginning a project to persuade management of its relevance, he claimed.
Explosively Beneficial
Amazon has teamed with industry leaders in recent years to provide industry-specific cloud services in areas such as manufacturing, health, and life sciences. Amazon, for example, is collaborating with Volkswagen to develop an industrial cloud platform that will assist the company in transitioning 124 facilities to a single software platform.
The executives declined to discuss how Goldman and AWS would split the money from the joint effort, but Solomon stated that he saw it as a chance for the bank to further embed itself with trading clients. Goldman intends to monetize the service through trading and financing alternatives, he added.
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