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>> Announcer: Live, from New York,
it's the Cube.
Covering AWS global summit 2019,
brought to you by Amazon Web Services.
>> Welcome back here in New York City, I'm Stewman
and my co-host is Corey Quinn.
In the keynote this morning,
Werner Vogels made some new announcements
about what they are doing
and also brought out a couple of customers who are local
and really thrilled and excited to have on the program,
the CIO and EVP from FINRA,
here in New York City, Steve Randich.
Thanks so much for joining us Steve.
>> You are welcome, thank you.
>> Alright, so, you know, quite impressive you know,
when I say one of those misunderstood words out there,
you talk about scale and you talk about speed
and, you know, you were taken so many notes
in your keynote this Monday.
500,000 compute notes, seven terabytes
for the new data daily
and half a trillion validation checks per day.
That's some pretty impressive scale
and therefore, you know, IT is not the org
that kind of sits in the basement
and the business doesn't think about it,
the business and IT need to be in lob stack.
So, you know, I think most people are familiar with FINRA
but maybe give us the kind of bumper sticker
as to what FINRA is today
and you know, the IT organization role.
>> Yeah, when I started at FINRA in 2013,
I thought I was going to come into a typical regulator,
which is, as you alluded to technologies
kind of in the basement, not very important, not strategic.
And I realized very quickly, two things.
Number one, the team was absolutely talented.
A lot of the people that we've got on our team
came from startups and other technology companies,
a typical and financial services.
And the second thing is we had a major Big data challenge
on our hands.
And so the decision to go to the cloud,
and I started in March in 2013, by July of that year,
I was already having dialogue with our board of directors
about having to go to the cloud in order to handle the data.
>> Yeah so, you know, Big data was supposed to be that
bit flip, that turn that,
oh my God I have so much data too!
Oh yeah, I can monetize and do things with our data.
So, give us a little bit of that that data journey
and what that you talked about the flywheel effect
that you've got inside FINRA.
>> Yeah, so, we knew that we needed the,
you know we were running at that time
on data warehouse appliances from EMC and IBM,
and which a data warehouse appliance, you know,
you go back 10-15 years,
that was where Big data was running
but those machines are vertically scalable
and when you hit the top of the scale
then you got to buy another bigger one,
which might not be available.
So, public cloud computing is all about horizontal scale
and commodity prices, two things that those
data warehouse appliance didn't have.
They were vertical and proprietary and expensive.
And so, the key thing was to come up,
to select the cloud vendor, you know,
between Google, IBM, you know, the usual suspects
and to architect our applications properly,
so that we wouldn't be overly vendor dependent
on the cloud provider and locked in, if you will
and that we could have flexibility
to use commodity software.
So we standardized in conjunction with our move
to the public cloud, on open source software,
which we continue today.
So, no proprietary software for the most part
running in the cloud.
And we were just very smart about architecting our systems
at that point in time,
to make sure that those opportunities prevailed.
And the other thing I would say,
and this is kind of of the secret of our success,
is it because we were such early adopters,
we were in the financial service industry
and a regulator to boot
that we had engineering access to the cloud providers
and the Big data open source software vendors.
So we actually had the engineers from AWS and other firms
coming in to help us learn how to do it, to do it right.
And that's been part of our culture ever since.
>> One thing that was, I guess, a very welcome surprise,
is normally these keynotes tend to fall
into almost reductive tropes,
where first we're going to have some Twitter
for pet style startup talking about
all the higher level stuff they're doing.
And then we're going to have a large or serious company come in
and talk about how we moved a VM from our data center
into the cloud, yay everyone clap.
Instead, there was,
it was very clear, you're using higher level,
much higher level services on top of other cloud provider
It's not just running VM somewhere else in the same way
you would on premise.
Was that a transitional step that you went through
or did you effectively when you went all in
start leveraging those higher services?
>> Okay, that's a great question,
and a differentiator for us versus a lot,
a lot of the large organizations with a legacy footprint
that would not be practical to rewrite.
We had outsourced IT entirely in the 90s to EDS,
and it was brought back in source, in house,
early in this decade and so we had kind of of a fresh,
fresh environment, fresh people, no legacy,
really other than the data warehouse appliances.
So we had a springboard to rewrite our apps
in an agile way to be fully cloud enabled.
So we work with AWS.
We work with Cloudera.
We work with CloudAIR and work with all the the key vendors
at that time and space to figure out how to write our apps
so that they could take most advantage
of what the cloud was offering at that time
and that continues to prevail today.
>> Yeah, that's a great point because you know,
so often, it's that journey to cloud,
but it's that application modernization,
that a tough journey >> Right.
>> So, bring us in a little inside there is you know,
how it is, you know, what expertise did FINRA have there?
I mean, you don't want to be building applications.
Is the open stuff, source the things, was it mature enough?
How much did they have to help work, you know?
Would you call it, you know, co-collaboration, co-cohesion ?
>> Yeah, the first year was hard, because I would have,
you know, every high performance database vendor
and I see a number of them here today.
I'm sure they're peddling their AWS version now
but they had a proprietary database version of saying,
if you want to handle the volumes that you're seeing
and predicting, you really need a proprietary.
They wouldn't call it proprietary, but it was essentially
a very unique solution, point solution,
that would cause vendor dependency.
And so, and then my architects internally, were saying,
no, we want to go open source,
because that's where the innovation and evolution
is going to be fastest and we're not going to have vendor lock in.
That decision, that bat, took about a year to solidify
but once we went that way, we never looked back.
So, from that standpoint, that was a good bat
and it made sense.
The other element of your question is,
how much of this did we do on our own
versus rely on vendors?
Again, the kind of of dirty little secret
of our beginnings here, is that we leveraged the engineer,
you know, so typically,
a firm would get the sales staff, right?
We got the engineers, and we insisted on it
in order to have them teach our engineers
how to do these re-architectures to do it right.
And we use that because we're in the financial service
industry as a regulator, right?
So they viewed us as a reference account,
that would be very valuable in their portfolio.
So in many regards, it was, you know,
we scratch each other's back.
But ultimately, the point is that,
their engineers trained our engineers
who trained other engineers and so,
when I did the, the keynote at the reinvent in 2016,
one of my, the pillars of our success was that,
we didn't rely overly on vendors.
In the end, we trained five to 600 of our own staff
on how to do cloud architectures correctly.
>> It's, I think, at this point,
it's very clear that you're something of an extreme outlier,
in that you integrate by the nature of what you do
with very large financial institutions.
And these historically have not been firms
that have embraced the cloud with the speed and enthusiasm
that FINRA has.
Have you found yourself as you're going in this all in
on the cloud approach, that you're having trouble
getting some of those other larger financial firms
to meet you there?
Or is that not really been a concern
based upon FINRA's position within the ecosystem?
>> I would say that five years ago, very rare,
I would say, you know, we've had a,
I made a conscious effort to be very loud
in the press and conferences about our journey,
because it has helped us attract talent.
People are coming to work for us as a financial service
regulator, that wouldn't have considered it five years ago.
And they're doing it because they want to be
part of this experience that we're having.
But as a byproduct of being loud in the press means that
a lot of firms are saying, well look at what FINRA is doing
in the cloud, let's go talk to them.
So we've had probably at this point 200 firms
that have come to FINRA to learn from our experience.
We've got this two hour presentation
that kind of goes through all the aspects
of how to do it, right, what to avoid, etc, etc.
And, you know, I would say,
now, the companies that are coming into us,
almost universally believe that it's the right direction.
They're having trouble, whether its political issues,
technology that, you name it,
for making the momentum that we've made
but unlike four or five years ago,
all of them recognized that it's the direction to go.
That's almost undisputed at this point.
And to your opening comment,
yeah, we're very much an outlier.
We've moved 97 plus percent of our apps.
99 plus percent of our data.
We are, I mean, the only thing that hasn't really been moved
to the cloud, at this point, are conscious decisions,
because those applications are going to die on the vine
in the data center or they don't make sense
to move to the cloud for whatever reason.
>> Okay, you've got almost all your data in the cloud
and you're using open source technology.
As Corey said, If I was listening
to a traditional financial services company, you know,
they're telling me all the reasons that for governance
and compliance that they're not going to do it.
So, you know, why do you feel safe,
putting your your data in the cloud?
>> Well we've looked at it.
I spent my first year at FINRA 2013, early 2014,
but mostly 2013, convincing our board of directors
that moving our most critical applications
to the public cloud, was going to be no worse
from an information security standpoint
than what we're doing in our private data centers.
That presentation ultimately made it to other regulators,
major firms on the street, industry, lobbyists groups
like SIFMA and FIF, got to a lot of air time.
And it basically made the point using logic and reasoning
that going to the cloud and doing it right,
not doing it wrong, but doing it right,
is at least as secure from a physical and logical standpoint
as what we were previously doing.
And then we went down that route, I got the board approval.
In 2015, we started looking at it and realizing,
wait a minute, what we're doing here encrypting everything,
using micro segmentation, we would never
and aren't doing this in our private data center.
Is more secure and at that point in time,
a lot of the analysts in our industry like Gartner Forrester
started coming out with papers that basically say,
'Hey, wait a minute, this perception of public cloud
is not as safe as on prem, that's wrong'.
And now we look at it like,
Oh, I can't imagine doing what we're doing now
in a private data center.
There's no scale, it's not as secure,
etc, etc, etc.
>> And to some extent, when you're dealing with banks
and we're a startup perspective now and they say,
Oh, we don't necessarily trust the cloud.
Well, that's interesting, your regulator does.
In other cases, some tax authorities do,
you provided a tremendous value,
just by being as public as you have been
that really starts taking the wind out of the sails
of the old fear, uncertainty
and doubt arguments around cloud.
>> Yeah, I mean, the doubts around it's not secure,
I don't have control over it.
If you do it right, those are manageable risks.
I would argue in some cases,
you've got more risk not doing it.
But I will caution, everything needs to be on the condition
that you've got to do it, right.
Sloppy migration into the cloud could make you less secure.
So there are principles that need to be followed
as part of this.
>> Alright, so Steve, doing it right?
You haven't been sitting still,
one of the things that really caught my attention
in the keynote was, you said in the last four years,
you've done three re-architectures.
And, what I want to understand, you said,
each time you got better price performance,
you know, you do things.
So, how do you make sure you do it right,
yet have flexibility both in an architecture standpoint
and, you know, don't you have to do
a three year reserved instance for some of these?
How do you make sure that you have the flexibility
to be able to take advantage of as you said,
the innovation and automation?
>> Yeah >> That Amazon
keeps moving forward with.
>> That's a deep time of a question, so I'm going to answer it
simply and say that we've architected the software
and hardware stack, such there's not
a lot of codependency between them.
And that's natural IT one on one principle,
but it's easier to do in the cloud,
particularly with an AWS who kind of covers the whole stacks.
You're not going to different vendors
that aren't integrated.
That helps a lot but you also have to architect it right.
And then once you do that, and then you automate
your software development lifecycle process,
it makes switching out any one component of that stack,
pretty easy to do and highly automated,
in some cases, completely automated.
And so, when new services or new versions of products,
new classes of machines, become available,
we just slip them in and the term I use this morning,
Mark America with Moore's Law, that's what we aspire to do.
To have the highest levels of price performance achievable
at the time lengths made available.
That wasn't possible previously, because you would go buy
a hardware kit and then you would depreciate it
for five years on your books.
The end of those five years, it would get kind of of,
have scale and reliability problems.
And then you go spend tens of millions of dollars
on a new kit and the whole cycle would start over again.
That's not the case here.
>> Yeah, machine learning something you've been dipping into,
tell us the impact what that has
and what you see going forward?
>> It's early, but we're big believers in machine learning
and there's a lot of applications for it at FINRA
in our various investigatory and regulatory functions.
Again, it's early, but I'm a big believer
that the compute and storage scale and commodity costs
in the public cloud can be tapped into and levered
to make AI and machine learning achieve
what everybody's been talking about
and hoping to achieve the last several decades.
We're using it specifically right now in our surveillance
for market manipulation and fraud.
So, fraudsters coming in and manipulating prices
in the stock market to take advantage of trading.
Early days, but very promising in terms of
what is delivered so far.
>> Alright, Steve, we want to give you the final word,
you know, thank you first of all, for being vocal on this.
It sounds like there's a lot of ways for people
to understand and see, you know, what FINRA has done
and really be a, you know, an early indicator.
So, you know, give us a little bit look forward,
you know, what more?
Where is FINRA going next on their journey?
And what do you want to see more from, you know,
Amazon and the ecosystem around them to make you know,
your life and life of your peers better?
>> Yes, so some of the kind of challenges
that Amazon is working with us and partnering us on,
is getting more automated into regional fell over.
Our industry is a little bit queasy about
having everything run with a relatively tight proximity
in the East Coast region.
And while we replicate our data to the other East region,
we think a more co-production environment
like we have across the availability zones within the East
would be looked upon with more,
you know, advocacy of that architecture
from a regulatory standpoint.
That would be one.
Another one would be, one of the big objections
to moving to a public cloud vendor like Amazon
is the vendor dependency.
And so, making sure that we're not
overly technically dependent on them is something that,
I think is a shared responsibility.
The view that you can go and run a single application
across multiple cloud vendors,
I don't think anybody's been able to successfully do that
because of the differences between the providers.
You can run one application in one vendor
and another application in another vendor, that's fine,
but that doesn't really achieve
the vendor dependency question.
And then, going forward for FINRA,
I mean, the real beauty is if you've architected
your applications right,
without really doing any work at all,
you're going to continuously get the benefits
of price performance as they go forward.
You're not kind of locked into a status quo.
So even without doing much of any new work
on our applications, we're going to continue
to get the benefits.
That's probably outside of the elastic, massive scale
that we take advantage of.
That's probably the biggest benefit of this whole journey.
>> Well Steve Randich really appreciated.
Thank you so much for sharing the journey of FINRA.
Alright for Corey Quinn, I'm Stewman back
with lots more here from AWS summit, New York City.
Thanks for watching the Cube.
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