The Milken Institute Global Conference in Beverly Hills, California, U.S., was attended by David Solomon, chief executive officer of Goldman Sachs.
The cloud computing business is being entered by Goldman Sachs.
CNBC has learned exclusively that the bank is opening up access to its market data and software tools to hedge funds and asset managers in an offering designed with Amazon's cloud division.
The two firms collaborated for two years and Goldman is now a provider of cloud services for Wall Street. Goldman CEO David Solomon is pushing to use technology to better serve clients of the firm's markets division, a trading powerhouse that has helped drive the firm's results this year.
Solomon told CNBC in a phone interview last week that clients of the firm will get access to the firm's decades of experience and data aggregation that should enable them to enhance their business decisions. That adds to our position as a leader in the marketplace.
The GS Financial Cloud for Data with Amazon Web Services will help asset managers save time by allowing their developers to focus on trades, rather than spending time wrangling data sets and leaning on a patchwork of legacy software to analyze them, the companies said. Goldman said it will lower the barriers to entry for firms to use advanced quantitative trading techniques.
Marco Argenti, co-chief information officer at Goldman, said that the industry is struggling to keep up with technological demands. The last decade has seen the rise of quantitative trading firms, which have soaked up assets, while traditional hedge fund managers have closed to outside investors.
A hedge fund client who wanted to chart the correlation between a stock and currency exchange rates could take months to assemble and clean the data. The analysis can be done in minutes by building applications atop data feeds and analytic tools that Goldman uses.
We would have used it, but we had to build it ourselves because there is nothing like this in the market. Everything else is taken care of for you if you assemble the interface and integrate it with your application.
The product was unveiled at the re:Invent conference in Las Vegas, and is the latest sign of the close ties between the tech giant and the leading Wall Street firm.
Adam Selipsky, who rejoined Amazon as head of Amazon Web Services earlier this year, said that the relationship began more than a decade ago when Goldman began to port over parts of its computing workload to the cloud.
Goldman relied on Amazon to quickly build its Marcus consumer finance business in 2016 and its Apple Card operations three years later. Goldman advised Amazon on its acquisition of Whole Foods.
Goldman was interested in learning how Amazon took computing services it had initially created for itself and turned them into the Amazon Web Services. The effort was referred to as Project Alexandria by the developers. He said that one technique Amazon taught Goldman was to work backwards, in which the tech giant writes a press release and FAQ before starting a project to convince managers of its importance.
Selipsky said that a lot of their customers ask them to help them do what Amazon did. When we started talking about Goldman's capabilities in data and financial services, the ideas just sprang up.
Amazon pioneered the cloud computing category, which allows companies to rent computing power and a suite of services instead of operating their own fields of server. Companies have been able to speed up software cycles, helping them stay on top of consumer demands. The lion's share of Amazon's operating profit is now accounted for byAWS.
In recent years, Amazon has worked with leaders in a number of sectors to build out industry-specific cloud services. Volkswagen is working with Amazon to create an industrial cloud platform that will help it move 124 factories to a single software platform.
Selipsky said Goldman is not only a bank or a financial services provider, it is also a software company. For a number of years, we have been figuring out how to expose the powerful capabilities that Amazon has in a way that is very beneficial to customers.
Solomon told CNBC that he saw it as a way to further entrench the firm with trading clients, despite the executives' refusal to give details about how revenue would be shared. He said that Goldman plans to monetize the service through trading and financing opportunities.
Solomon said that it enhances the experience of institutional clients and gives them access to our data and information. We get more of their wallet share because the experience and services we provide gives us more mindshare, more opportunities to trade with them, to finance them and do things like that.
