Morgan Stanley, the global investment bank, has announced a cloud partnership with Microsoft to accelerate the bank’s technology development.
Scott Guthrie, executive vice president, Cloud + AI at Microsoft said he met Morgan Stanley’s head of Technology, Operations & Firm Resilience, Rob Rooney, at a conference three years ago, although the partnership between the two firms goes back “a long ways.”
The investment bank wants to improve time to market, said Rooney. The joint strategy for the cloud is not lift and shift but working to design for the cloud to modernize the tech stack from front to back.
“The business is changing fast,” he added, and the bank’s recent acquisitions of E*Trade and Eaton Vance have raised the stakes. Eaton Vance brings more fee-based revenue, said James P. Gorman, chairman and CEO of the bank when the deal closed in March. With the addition of Eaton Vance, Morgan Stanley will oversee $5.4 trillion of client assets across its wealth management and investment management segments, the bank said at that time.
Last October it announced the acquisition of E*TRADE, giving the bank an entree into the world of direct-to-consumer and digital self-directed business.
Working with Microsoft, Morgan Stanley wants to be able to meet its clients in the cloud in way that is safe, secure and efficient. Rooney said those clients range from retail investors that may have been acquired through E*TRADE to high net worth and super high net worth individuals, industrial corporations and wealth managers. They will all be better served by a more modern cloud-based platform.
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The bank has already done a significant amount of foundational work with cloud-based applications, Rooney added. In addition to Microsoft, the bank has very strong partnerships with IBM, AWS as well as a growing partnership with Google, he said.
Both Morgan Stanley and Microsoft have a deep engineering culture, Guthrie said, and both are committed to open source technology and standards, the executives said.
“Microsoft is definitely changed from where we were 10 years ago,” said Guthrie. ”We have gone from ‘our way or the highway’ to meeting our customers’ needs, including regulatory and compliance needs. In enterprise, we use a wide variety of technology. We have moved to open source, and GitHub is the home of open source today. Definitely our approach is very standards based.”
The two firms will bring together “common data models, cross-cloud connectors, workflows, APIs, and financial industry-specific components and standards,” the announcement said.
“The companies’ engineers will also collaborate on requirements and capabilities across the latest technology to drive client- and business-centric innovation in financial services in faster and more flexible ways by leveraging Morgan Stanley’s deep engineering and domain expertise,” they added.
Morgan Stanley is particularly interested in Microsoft’s Power Apps — a low-code or no code development tool, and Azure Data Lake Analytics which offers pay as you go data analytics in the cloud.
Microsoft appreciates Morgan Stanley’s broad global scale, said Rooney, and its need to operate 24×7 for wealth management.
“We have a lot of legacy technology and our ability to put the whole firm up in the cloud will probably never happen. Certain data types we have and certain things we do — we are the world leader in low latency trading in cash equities” will probably remain on-prem.
“We expect a lot of Morgan will be in a public cloud and a significant portion will be on Azure. We will measure the satisfaction and agility of our engineers and the better experience our employees will have with modern tools available only in the cloud. We would expect to see a much more powerful customer experience for wealth and a much richer data experience for institutional clients on the investment banking side.”