Westpac bursts risk analysis to Azure

Crunches data in the cloud to avoid breaking the bank.

Westpac has begun bursting part of its data crunching workload onto Microsoft’s hosted Azure platform to better inform the bank’s decision-making processes.

Previously, an in-house analytics platform performed risk calculations overnight, using methods developed by Westpac’s quantitative analysts.

According to enterprise infrastructure architecture head Eugene Zaid, the in-house platform could produce increasingly granular information given enough computing power.

“The only limitation really is the amount of computing power available, as complexity of calculations grows exponentially once you request to see finer and finer points,” he explained.

“At some stage, it becomes simply uneconomical to build an in-house platform with massive amounts of memory, processing power and so on, that will only be used for a few hours a night.”

As a major, established player in a highly regulated industry, Westpac tended to approach cloud computing conservatively.

In June, Westpac group technology executive Bob McKinnon revealed plans to consume email and collaboration software as a managed service from Microsoft and Fujitsu.

Westpac chief technology offer Sarv Girn has previously estimated the 'private cloud' to cost 30 to 40 percent less than what was previously required. Zaid said Westpac did not share any IT infrastructure with other tenants of Fujitsu’s Australian data centre.

National privacy laws, PCI compliance and guidelines published by Australian financial services regulator APRA typically discouraged banks from moving customer data offshore.

Those regulatory concerns did not apply to the analytics platform which, as Zaid said, involved “no customer data”.

Some 50 to 60 percent of calculations were performed in Microsoft's US-based cloud. The application itself remained on Westpac infrastructure to protect the bank’s intellectual property and avoid lock-in.

“Surprising enough, our risk and security gurus were comfortable with considering the cloud for this application,” Zaid told a Gartner Summit this week.

“There is no customer data involved, and the only information going into the cloud and back was a string of numbers which did not have any meaning to those outside the bank.

“Even if the US Government decides to capture it [under the US Patriot Act], so what,” he said.

Zaid said the application crunched publicly available data, including yield curves, commodity and security prices, indices, Reuters and Bloomberg feeds.

Only input and output data needed to be transferred from Azure to Westpac in Australia, so while computational requirements were high, traffic was low.

“By design, the actual system remains in-house,” Zaid said. “Only when the volume of calculations exceeds a set threshold, it will spill over the excess into the cloud.

“The idea behind the design was to retain the IP in-house and ensure that there is no lock-in from any vendor and we can move to any provider that we feel is best suited to that at the time.

“We considered Azure as Microsoft is one of our primary partners, as well as Amazon and a couple of other providers. Initial launch is with Azure in the States but there is capability to point our application to other clouds as well.”

Zaid urged his peers to look beyond the cloud computing hype, noting that there was “no point putting something in the cloud because it’s fashionable”.

The role of technologists, he said, was to ensure that IT products and environments were stable, well-designed and secure to support business outcomes.

“We all sit here saying, what are our challenges, what keeps us awake at night,” he said. “The worst thing about being a technologist is getting called in the middle of the night, saying that your system is broken.

“It’s our job to ensure that the systems work, no matter what the business is asking for, we can’t rush in. We have to do testing. We have to ensure the quality of the design, the security and so on.

"If we don’t do things right, [customers and employees] will suffer as a result and if we make their lives miserable, our lives will be miserable.”