Accessing Japan Exchange Group (JPX) arrownet through AWS

We often hear the term “undifferentiated heavy lifting.” This refers to resource-intensive work that needs to be done, but doesn’t differentiate you from your competitors. Building servers and applying security patches to your OS are examples. Such tasks take away time, talent, and capital from higher-value initiatives that set your products and services apart. At AWS, a key part of our customer obsession is helping to liberate developers from undifferentiated heavy lifting with cloud-enabled solutions that can simplify and automate tasks.

There has been massive progress within the financial services industry over the last 20 years. In the Capital Markets sector, for instance, the availability of market data in the cloud has given trading teams the ability to drive better insights in real time as well as more efficiently calculate risk from growing amounts of data.

Unfortunately, for some firms, “undifferentiated heavy lifting” still exists. One area relates to financial firms having to comply with regulations and industry rules set by regulatory agencies and exchanges. Market participants must comply with these market rules or face penalties.

Financial services is one of the most heavily regulated industries in the world where ever-evolving requirements have increased in complexity and granularity. And yet, for all the resources financial institutions invest in compliance, the majority are not making the shift from obligation to opportunity. In other words, most firms still see regulatory compliance as the cost of doing business instead of a chance to differentiate from their peers.

To draw a baseball analogy: Players must follow the rules of the game, but the winners are usually those who use strategies and tactics to improve the performance at both the individual and team levels. Similarly, firms must meet regulatory requirements but should push for more streamlined, automated, and cost-effective ways to do so.

In this post, we examine how Japan Exchange Group (JPX) is innovating on AWS to create a better experience for market participants. By reducing the undifferentiated heavy lifting previously associated with access to its network, JPX is enabling firms to re-deploy their resources towards testing, building, and launching new services.

JPX enhances market access in the cloud for member firms

In May 2020, JPX enabled market participants to access arrownet, a highly reliable network connecting to its trading and market information systems, via AWS Direct Connect.

Previously, if member firms wanted to connect to arrownet, they had to order leased lines between JPX and their own offices or data centers as well as implement network construction and security measures. This network configuration needed to be reliable, provide stable services, and deliver scalability for responding quickly to fluctuating markets. Once the line was connected, the market participants then had to monitor it 24×7 and commit headcount to respond to any hardware failures. Management of circuits also came with labor and support costs for these critical tasks. In short, connecting to arrownet was undifferentiated heavy lifting that firms took on for years.

By listening to feedback, JPX expanded the availability of arrownet services to the cloud, giving market participants simplified access. Handling market data right into their AWS environments results in faster time to market and the ability to scale on demand to accommodate market fluctuations.

JPX provides an AWS Direct Connect virtual interface that allows member firms to connect and test the connection in a shorter period. As a result, AWS customers can receive data from JPX’s market into their cloud environments without the undifferentiated heavy lifting they previously faced with leased line connections.

Not only are current member firms benefiting from streamlined market access, but FinTechs are, too. Fintech startups with fast access to the market can further shrink time-to-market for new products and services. As many FinTechs use AWS services, they require cloud-native connection to better leverage the existing environment.

Finally, with AWS Direct Connect, JPX has opened up TCP/IP in test environments and is requesting feedback from both member firms and FinTechs on additional enhancements. Through such initiatives, JPX is making it easier for market participants to access the market.

JPX arrownet is a mission-critical workload, and the impact to the Japan market is sweeping with global implications. By providing a gateway service to its network via AWS, JPX is utilizing the cloud as a game-changing approach in how market participants interact with exchanges.

As financial firms look to reduce their undifferentiated heavy lifting, AWS remains ready to help. Our global infrastructure, more than 175 services, and expansive community of APN Partners meet the variety of needs that our financial services customers have, and we are committed to delivering against the highest standards they have for security, resiliency, and scalability.

AWS helps our customers shorten time to market for new products and services as well as deepen customer engagement. We deliver the speed and scale they need to innovate in a highly competitive market.

JPX makes arrownet access simple and quick

To learn more about the access to JPX arrownet opportunity download the recently published JPX arrownet Connection for AWS: Implementation Guide.

This implementation guide has two purposes:

• Help financial institutions with existing connections to arrownet easily and quickly migrate to the AWS-enabled connection
• Help FinTechs that need native cloud delivery to support their applications and development understand JPX rules

Discover different usage scenarios for market participants and explore reference architectures that are built according to the five pillars of the AWS Well-Architected framework: Operational Excellence, Security, Reliability, Performance Efficiency, and Cost Optimization.