Google Locks On to the Finserv Industry With 10-Year CME Partnership

The ten year partnership with CME Group establishes Google’s presence in the financial services industry that is beginning to spend heavily in cloud computing services.

Alphabet Inc. subsidiary Google has made a $1 billion investment in CME Group, the world’s largest financial derivatives exchange. In turn, the Chicago-based group will shift its trading systems to the Google Cloud Platform, the two companies announced this week.

CME, a Chicago-based exchange operator, will begin migrating its IT infrastructure to Google Cloud next year under the terms of  a ten-year partnership between the two companies. In a statement late Thursday, CME Group said that the decision would further expedite the company’s migration to the cloud and alter how worldwide derivative markets operate using technology.

“CME Group has a century-long track record of helping investors access new markets and is known for innovation in financial markets,” said Thomas Kurian, CEO, Google Cloud. “Bringing together CME Group’s best-in-class financial talent with Google Cloud’s deep engineering expertise will help accelerate technological innovation in capital markets infrastructure.”

“Through this long-term partnership with Google Cloud, CME Group will transform derivatives markets through technology, expanding access and creating efficiencies for all market participants,” said Terry Duffy, the chairman and CEO of CME Group. 

“To ensure a smooth transition, we will work closely with clients to implement a phased approach. This partnership will enable CME Group to bring new products and services to market faster – all in a flexible and scalable environment that will create a wide range of opportunities for the marketplace.”

See More: Facebook Pulls the Plug on Face Recognition: A Genuine Move or Publicity Stunt?

The cooperation will offer substantial benefits to all market players by:

• • CME Group will be able to extend its infrastructure while improving access for additional market players, lowering expenses, and making new user onboarding easier and faster by utilizing Google Cloud’s fast, secure, global network.
  • CME Group will give customers on-demand information and toolkits for constructing models, algorithms, and real-time risk management using Google Cloud’s data analytics and machine learning tools.
  • Introducing new products and services: CME Group will co-innovate new products, including risk mitigation tools, analytics services, and user-centric platforms, using Google Cloud’s technology. The two businesses will also continue to look for ways to collaborate on go-to-market activities that will bring new products to CME Group’s clients.
  • Improving efficiency: CME Group will simplify operations, enhance its IT infrastructure, and automate non-trading functions by shifting to the cloud.
  • Driving the financial markets ecosystem’s resilience: Google Cloud, as CME Group’s preferred cloud partner, will provide open source technological standards as well as better cybersecurity protection.

Duffy has named Ken Vroman as the group’s new chief transformation officer to aid CME Group’s cloud transformation. In addition, Google has made a $1 billion equity investment in CME Group’s new series of non-voting convertible preferred shares.

The agreement with CME is a huge success for Google’s cloud division, which competes for large, lucrative contracts from Fortune 500 businesses with market leaders Amazon and Microsoft. The deal also establishes Google’s presence in the financial services industry that is beginning to spend heavily in cloud computing services.

See More: Top 5 AWS Misconfigurations That Led to Data Leaks in 2021

The news came a few weeks after Google Cloud announced another investment in Cybereason, a cybersecurity firm located in Tel Aviv and Boston, Massachusetts. The security software company has received a $50 million funding from Google Cloud.

Besides, in early October, Google announced in its virtual conference that it would invest $1 billion in Africa over the next five years to guarantee that the continent has access to fast and affordable internet and backing companies to accelerate the region’s digital transformation.

Meanwhile, on Tuesday, Google also announced a surprise investment in autonomous driving platform Nuro during a recent $600 million Series D financing round, which would help the business boost commercialization of its robotic delivery services.

With the year 2021 coming to an end, it would be interesting to see if Google’s investment spree would come to an end with one of its biggest investments of the year with CME Group, or if it has new avenues to explore for investments before jumping into 2022.

Let us know if you enjoyed reading this news on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We would love to hear from you!