WEBVTT - Broadcasting Live from SmarshCONNECT Event 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.680 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.520 --> 0:00:29.360 Steve Marsh is with us, a chairman and founder of 0:00:29.400 --> 0:00:33.040 Smash and joining us here on site. First of all, 0:00:33.240 --> 0:00:36.400 compliance is a big issue, and it has been growing, 0:00:36.400 --> 0:00:38.560 I think, coming off the Great Financial Crisis, and I 0:00:38.600 --> 0:00:40.680 think it's interesting to hear how people are talking about 0:00:40.720 --> 0:00:43.320 it in regards to AI. But first of all, take 0:00:43.360 --> 0:00:45.760 a step back twenty years ago when you started your 0:00:45.760 --> 0:00:47.280 company and kind of where we were. 0:00:48.200 --> 0:00:51.440 Sure, so there's probably two thousand and one, I think 0:00:51.479 --> 0:00:54.760 when I first started Smash, and so twenty three years 0:00:55.040 --> 0:00:59.160 well then, so yeah, the time flies, but yeah, really, 0:00:59.200 --> 0:01:01.920 I was doing some insulting for financial services firms and 0:01:02.520 --> 0:01:05.440 had a few of them all around the same time 0:01:05.480 --> 0:01:07.160 asked me to help them comply with what were then 0:01:07.280 --> 0:01:11.240 relatively new rules and requirements forcing them to capture their email. 0:01:11.280 --> 0:01:13.040 So it was really just email that was a problem, 0:01:13.080 --> 0:01:15.720 and most organizations just needed to find a way to 0:01:15.760 --> 0:01:18.800 retain it so that the compliance departments could produce it 0:01:18.840 --> 0:01:21.200 when a regular came asking for it, and I helped 0:01:21.200 --> 0:01:22.440 a few of them do it and eventually found that 0:01:22.440 --> 0:01:24.759 there was a bigger and bigger business opportunity. And that's 0:01:24.800 --> 0:01:25.479 how it all started. 0:01:25.560 --> 0:01:26.840 What was the way that you were able to do 0:01:26.880 --> 0:01:30.399 it back then that other people weren't doing. What was 0:01:30.440 --> 0:01:33.039 the value add that you brought that the industry wasn't 0:01:33.040 --> 0:01:33.560 saying yet? 0:01:33.800 --> 0:01:35.640 I think the biggest value add was that I had 0:01:35.680 --> 0:01:37.880 come from the financial services industry, and a lot of 0:01:37.720 --> 0:01:40.200 my competitors at the time, and there were quite a 0:01:40.240 --> 0:01:45.160 few were really web hosting companies or internet service providers 0:01:45.160 --> 0:01:47.200 that thought they would just get into the email retention 0:01:47.319 --> 0:01:52.000 space and sell an additional product. We were very different 0:01:52.040 --> 0:01:55.160 from day one, only focusing on broker dealers and and 0:01:55.200 --> 0:01:58.440 investment advisors and really understanding the regulatory requirements that they 0:01:58.480 --> 0:02:00.960 had to comply with. That gave a lot of the 0:02:01.000 --> 0:02:03.520 companies that we worked with much more comfort that when 0:02:04.280 --> 0:02:06.640 a regulator came knocking on their door, we would understand 0:02:06.640 --> 0:02:08.440 exactly what needed to be done, the step thing to 0:02:08.480 --> 0:02:11.400 be taking the proof of you know, the steps that 0:02:11.440 --> 0:02:14.240 we're taking or that were taken and helping them retain 0:02:14.280 --> 0:02:15.040 their their compliance. 0:02:15.120 --> 0:02:16.840 It's interesting, Steve, if you think about it, right, like, 0:02:16.880 --> 0:02:18.840 in terms of where communications were twenty three. 0:02:18.800 --> 0:02:20.720 Years ago and how they have evolved. 0:02:21.639 --> 0:02:23.799 We communicate and then you know, layer on the pandemic 0:02:23.800 --> 0:02:26.079 on top of it, things have gotten much more complicated. 0:02:26.280 --> 0:02:28.680 How has that changed your business and what you guys do? 0:02:29.480 --> 0:02:29.639 Well? 0:02:29.840 --> 0:02:31.760 Early on, you know, as you alluded to, it was 0:02:31.760 --> 0:02:33.680 really just email that companies needed to deal with, and 0:02:33.680 --> 0:02:36.320 then eventually it was AOL and SIT messenger and of 0:02:36.320 --> 0:02:39.000 course Bloomberg's messaging protocols as well. 0:02:39.080 --> 0:02:41.400 So you know, over the. 0:02:41.360 --> 0:02:46.160 Last two decades, that list of relatively few communication channels 0:02:46.160 --> 0:02:49.480 has exploded to now include well over one hundred and 0:02:49.520 --> 0:02:51.640 hundred and fifty different types of communication, and some of 0:02:51.680 --> 0:02:55.040 the largest organizations that we serve we'll have you know, 0:02:55.160 --> 0:02:57.480 dozens fifty one hundred different types of communication. So that 0:02:57.520 --> 0:03:00.280 has created a lot of opportunity for us to up 0:03:00.320 --> 0:03:02.360 new products and new solutions to help our customers, but 0:03:02.360 --> 0:03:04.520 it also creates a lot of challenges for those that 0:03:04.600 --> 0:03:05.760 have to to work with them. 0:03:05.800 --> 0:03:07.480 I always think about in COVID, right we were talking 0:03:07.520 --> 0:03:09.359 about you know, in terms of spreading the virus, like 0:03:09.400 --> 0:03:10.919 the touch points, and I just think about in terms 0:03:10.960 --> 0:03:13.680 of the financial community, the touch points as information is 0:03:13.680 --> 0:03:16.560 shared and moved around, they have increased and that means 0:03:16.639 --> 0:03:18.640 greater risk potentially absolutely. 0:03:18.680 --> 0:03:20.520 I mean you have to you have to look at 0:03:20.560 --> 0:03:22.400 all those different endpoints you have. You may follow a 0:03:22.400 --> 0:03:25.639 conversation that starts on text message and then moves to 0:03:26.560 --> 0:03:29.799 email and then is picked up later on WhatsApp or 0:03:30.760 --> 0:03:32.880 you know, some other communication channel. If you don't have, 0:03:33.360 --> 0:03:35.720 you know, a good sense of what's happening in your organization, 0:03:35.760 --> 0:03:37.840 you're not going to be able to follow the entire conversation. 0:03:37.880 --> 0:03:40.280 It's not single thread anymore. It's not just taking place 0:03:40.320 --> 0:03:41.080 in one venue. 0:03:41.400 --> 0:03:41.680 Okay. 0:03:41.680 --> 0:03:43.520 So a big issue with the SEC has been so 0:03:43.640 --> 0:03:46.840 called disappearing message services. How do you guys deal with that? 0:03:48.360 --> 0:03:51.000 Well, there are certain ones that were designed specifically not 0:03:51.120 --> 0:03:53.720 to be captured and retained. There are others that you know, 0:03:53.760 --> 0:03:57.200 we can help with from a technology standpoint. You know, 0:03:57.240 --> 0:04:00.000 if something is specifically designed not to be viewed in mind, 0:04:00.320 --> 0:04:02.200 and I think that that's where policy comes in for 0:04:02.240 --> 0:04:07.520 most organizations. Right wherever possible, we develop different mechanisms of 0:04:07.560 --> 0:04:10.280 capturing the messages so that they can be sort of archive. 0:04:10.360 --> 0:04:13.320 What if you're working with an organization where okay, yes, 0:04:13.440 --> 0:04:16.080 my work accounts are ones that can be captured, but 0:04:16.320 --> 0:04:18.800 a lot of my communication happens over my personal devices 0:04:18.880 --> 0:04:19.920 or my personal services. 0:04:20.600 --> 0:04:24.000 How does that work? Again, it's kind of nuance. It 0:04:24.000 --> 0:04:27.599 depends on the communication channel. Some of the early social 0:04:27.640 --> 0:04:30.799 networks introduced that very problem, where with Facebook, for example, 0:04:30.839 --> 0:04:32.560 you only had a personal profile if you were also 0:04:32.640 --> 0:04:35.440 using it for work, well, that meant that the organization 0:04:35.560 --> 0:04:39.080 had to effectively retain your personal communications and you had 0:04:39.080 --> 0:04:40.920 to authorize them or you know, acknowledge that you were 0:04:40.920 --> 0:04:45.200 going to use something like Facebook for personal and business 0:04:45.200 --> 0:04:48.159 communications and you'd give the firm basically the ability to 0:04:48.160 --> 0:04:48.719 capture them. 0:04:48.839 --> 0:04:49.039 You know. 0:04:49.040 --> 0:04:50.320 One of the things I love about that we kind 0:04:50.320 --> 0:04:51.719 of try and do at Bloomberg, and I think we 0:04:51.720 --> 0:04:53.440 do it pretty well, is just kind of open windows 0:04:53.440 --> 0:04:55.760 into worlds that maybe people don't know about, but is 0:04:55.839 --> 0:04:57.280 just such a big part of our world. And we 0:04:57.320 --> 0:04:59.760 did it today with an earlier story had to do 0:04:59.800 --> 0:05:02.039 with roans and so on and so forth. But I 0:05:02.080 --> 0:05:04.120 think about this is such a part of the financial world, 0:05:04.400 --> 0:05:05.920 you know, and kind of reading in tim and I, 0:05:06.200 --> 0:05:08.400 you know, I think nineteen of the world's largest twenty 0:05:09.080 --> 0:05:12.400 banks are your clients. Like, this is something that every 0:05:12.400 --> 0:05:15.000 financial institution is involved in a big way and has 0:05:15.080 --> 0:05:17.320 to be absolutely in terms of what you do in 0:05:17.360 --> 0:05:18.480 the services you provide. 0:05:18.600 --> 0:05:21.800 Yeah, it's not always the most well known service, you know, 0:05:21.920 --> 0:05:26.760 among the public, but every broker dealer, investment advisor, or bank, 0:05:26.880 --> 0:05:29.720 you know, hedge fund, you know, really has some regulations 0:05:29.760 --> 0:05:32.280 they need to comply within where they're often behind the 0:05:32.320 --> 0:05:35.080 scenes or behind the scenes as one of their most 0:05:35.080 --> 0:05:35.880 critical partners. 0:05:36.560 --> 0:05:38.040 Is it getting more complicated? 0:05:38.040 --> 0:05:40.239 And I think about with financial disruption, and I think about, 0:05:40.279 --> 0:05:42.600 you know, layer kind of what we've seen in cryptocurrency, 0:05:42.640 --> 0:05:45.800 and I don't know the financial industry, it's just like 0:05:45.880 --> 0:05:47.479 more and more things are being thrown at them in 0:05:47.480 --> 0:05:50.279 different ways. And I always think about is a regulatory 0:05:50.320 --> 0:05:53.000 oversight and the systems in place to kind of keep 0:05:53.080 --> 0:05:54.599 up with it. 0:05:54.600 --> 0:05:57.120 It definitely gets more and more challenging, and I think, 0:05:57.160 --> 0:05:59.440 you know, over the past two decades, it's gotten to 0:05:59.480 --> 0:06:02.160 the point where the compliance function is probably one of 0:06:02.200 --> 0:06:07.240 the most sophisticated within a financial services organization. I certainly 0:06:07.240 --> 0:06:09.520 don't envy some of the professionals that have to deal 0:06:09.560 --> 0:06:12.080 with other aspects of compliance, you know that's marsh doesn't 0:06:12.080 --> 0:06:15.159 even really touch or play in, you know. So it's 0:06:15.200 --> 0:06:18.719 a challenging job and it's a significant area of focus 0:06:18.800 --> 0:06:20.080 for the financial industry. 0:06:21.040 --> 0:06:23.000 One thing that's so interesting about what you do is 0:06:23.040 --> 0:06:25.400 you have so many different clients, you have so many 0:06:25.400 --> 0:06:28.720 touch points on the economy. And one thing that I'm 0:06:28.760 --> 0:06:31.440 interested in is here we are in twenty twenty four 0:06:31.800 --> 0:06:33.440 where it's sort of like if we were doing this 0:06:33.480 --> 0:06:36.600 a year ago, the question would be, Okay, when's the recession? 0:06:36.600 --> 0:06:38.400 But the economy it seems like it is firing on 0:06:38.440 --> 0:06:41.279 all cylinders right now. What are you hearing and certainly 0:06:41.320 --> 0:06:43.800 that's what the economic data is indicating to us. What 0:06:43.839 --> 0:06:46.520 are you hearing from your customers right now when you're 0:06:46.520 --> 0:06:49.680 talking to them about different products, different services when it 0:06:49.720 --> 0:06:52.760 comes to how they're doings of how they're doing, yeah, 0:06:52.760 --> 0:06:53.320 how they're doing. 0:06:53.279 --> 0:06:54.960 Because it like you wonder do they pick and choose 0:06:54.960 --> 0:06:56.560 and say, I mean compliance they have to do, but 0:06:56.680 --> 0:06:58.400 do they pick and choose a little bit because they're 0:06:58.400 --> 0:07:00.440 a little bit worried about the account the outcome, or 0:07:00.440 --> 0:07:01.279 do you never see that. 0:07:02.080 --> 0:07:04.240 I mean, most of the conversations we have are more 0:07:04.240 --> 0:07:07.440 specifically related to their compliance and technology challenges, the types 0:07:07.440 --> 0:07:11.400 of communication tools they're using, you know it. Maybe we'll 0:07:11.400 --> 0:07:14.080 see a little bit in terms of how they're they're 0:07:14.480 --> 0:07:18.000 expanding or contracting the organization, right not even really we 0:07:18.040 --> 0:07:20.080 don't know always have a great sense of that either. 0:07:20.920 --> 0:07:23.400 So as far as like their views on the economy 0:07:23.400 --> 0:07:25.560 and what's happening globally, and we don't get too much 0:07:25.600 --> 0:07:28.320 of that. It's more, uh, it's more focused on compliance. 0:07:28.520 --> 0:07:31.440 Does crypto come up? How does does crypto come into 0:07:31.480 --> 0:07:31.840 your world? 0:07:31.880 --> 0:07:32.200 As well? 0:07:32.680 --> 0:07:34.360 It does? And I think there was quite a bit 0:07:34.360 --> 0:07:35.920 of buzz about it, especially a year and a half 0:07:35.920 --> 0:07:38.640 two years ago, about you know, how crypto was going 0:07:38.680 --> 0:07:40.960 to be regulated and really for us, you know, what 0:07:40.960 --> 0:07:43.560 what is Marsh's role, what in what are our client's 0:07:43.640 --> 0:07:47.520 role in that. I would say it's not the biggest issue, 0:07:47.720 --> 0:07:49.160 you know, but it's still in the background. 0:07:49.200 --> 0:07:49.320 There. 0:07:49.320 --> 0:07:53.240 There's a lot more discussion today about artificial intelligence and 0:07:53.320 --> 0:07:56.040 how how it should be regulated and how it can 0:07:56.120 --> 0:07:59.640 be used to help with you know, communication, you know, 0:07:59.680 --> 0:08:00.560 monitor and surveillance. 0:08:00.560 --> 0:08:02.240 I mean, we're gonna have a bunch of conversations about that. 0:08:02.280 --> 0:08:03.920 How are you guys preparing for it? I know we're 0:08:03.920 --> 0:08:05.800 gonna have some some future conversations that are going to 0:08:05.800 --> 0:08:07.240 dig a little bit deeper into it, But how are 0:08:07.280 --> 0:08:09.240 you guys getting ready for it? Or how have you 0:08:09.280 --> 0:08:12.320 been planning around it? What are your clients saying, Pea, Steve, 0:08:12.480 --> 0:08:13.240 are you working on this? 0:08:13.640 --> 0:08:18.480 Yeah, we've We've had an aspect of artificial intelligence as 0:08:18.520 --> 0:08:21.440 part of our services for many years, and really it's 0:08:21.440 --> 0:08:25.520 to address the reality that the data volumes just are 0:08:25.560 --> 0:08:29.320 growing constantly, so our customers are faced with a challenge 0:08:29.320 --> 0:08:31.960 where they have to sift through not only growing number 0:08:32.000 --> 0:08:34.800 of communication channels, but the number of messages that are sent, 0:08:35.280 --> 0:08:38.840 you know, within each of those has grown exponentially. And 0:08:38.880 --> 0:08:41.160 it used to be that human beings could inspect and 0:08:41.200 --> 0:08:43.880 look at the messages that we would get flagged for 0:08:44.000 --> 0:08:47.880 some sort of potential compliance violation. Now it's becoming increasingly difficult. 0:08:47.960 --> 0:08:53.839 So the use of artificial intelligence helps them manage that workload. 0:08:54.440 --> 0:08:56.040 So that that's probably the biggest use case in the 0:08:56.040 --> 0:08:59.200 biggest area that we hear about. But there's also certainly 0:08:59.240 --> 0:09:02.000 a discussion about how firms need to think about their 0:09:02.040 --> 0:09:05.000 own use of artificial intelligence, and if that if that 0:09:05.080 --> 0:09:08.400 becomes a communication itself that needs to be archived and monitored, 0:09:08.520 --> 0:09:10.600 or or if they have you know, a bot on 0:09:10.600 --> 0:09:13.800 their website that's communicating with investors, you know, how does 0:09:13.840 --> 0:09:15.240 that fit into the compliance obligation? 0:09:15.320 --> 0:09:17.520 I didn't even think about that, like monitoring the bot right, 0:09:17.640 --> 0:09:18.480 Like it's going to be part of it. 0:09:18.679 --> 0:09:20.320 Who monitors the bot? That's monitoring the bot? 0:09:20.640 --> 0:09:21.240 That's the question? 0:09:21.280 --> 0:09:21.760 Another bot? 0:09:21.880 --> 0:09:25.440 Yeah, okay, okay? So what about when it comes to 0:09:25.440 --> 0:09:27.480 the AI, are you deploying the AI or is the 0:09:27.520 --> 0:09:29.800 AI being deployed by these companies internally? 0:09:30.440 --> 0:09:30.680 Uh? 0:09:31.240 --> 0:09:36.040 For the surveillance, Yeah, and monitoring. We help the customers 0:09:36.080 --> 0:09:40.600 deploy that, but it's with their own They are their 0:09:40.640 --> 0:09:42.160 own input in terms of what they want to look 0:09:42.200 --> 0:09:44.000 for and what they're they're trying to use it for. 0:09:44.120 --> 0:09:46.560 Have you had to make specific hires around that type 0:09:46.600 --> 0:09:48.760 of technology that in this environment? 0:09:48.800 --> 0:09:49.280 Many? 0:09:49.400 --> 0:09:49.480 So? 0:09:49.720 --> 0:09:52.040 How is that? Because I mean it's like a serious 0:09:52.040 --> 0:09:52.880 talent we're going on. 0:09:53.440 --> 0:09:55.319 Yeah, And I think we've we've been very fortunate that 0:09:55.360 --> 0:09:57.400 our that our use cases is interesting. I think to 0:09:57.440 --> 0:10:02.000 the professionals that get to work get to work on 0:10:02.120 --> 0:10:07.160 artificial intelligence. We've got very large data stores, you know, 0:10:07.720 --> 0:10:10.920 high significance use cases to get people excited, so it's 0:10:10.920 --> 0:10:15.160 always been relatively easy to find high quality tech talent. 0:10:15.200 --> 0:10:18.600 It's mart just because we've got high security use cases, 0:10:18.600 --> 0:10:21.640 big data, always on the cutting edge of the communication 0:10:21.679 --> 0:10:23.600 tools that people want to use, so. 0:10:23.559 --> 0:10:24.480 They want to be a part of it. 0:10:24.840 --> 0:10:27.800 I'm just thinking about the Bloomberg audience, investing audience, just 0:10:27.800 --> 0:10:29.920 people who want to know on trends and waves. Just 0:10:29.960 --> 0:10:32.560 got about a minute or forty five fifty seconds left here. 0:10:33.040 --> 0:10:34.440 What do you think they need to know about? Kind 0:10:34.440 --> 0:10:36.520 of the world that you're seeing and smartsh connect Like 0:10:36.679 --> 0:10:39.680 the leaders that are here, whether it's AI, compliance technology, 0:10:39.760 --> 0:10:41.000 what do you think they need to be aware of? 0:10:41.280 --> 0:10:42.880 I think they need to be aware that we are 0:10:43.000 --> 0:10:44.960 working as hard as we can every single day to 0:10:45.000 --> 0:10:49.560 make sure that our clients can continue to use the 0:10:49.559 --> 0:10:51.960 communication tools that they want to which in essence, is 0:10:52.000 --> 0:10:55.439 really just allowing investors to use the communication tools they 0:10:55.480 --> 0:10:58.520 want to use when they engage with their financial professional. 0:10:59.360 --> 0:11:02.679 Sounds like a real, relatively simple order, but it's a 0:11:02.800 --> 0:11:04.480 it's a it's a big ass because there are so 0:11:04.520 --> 0:11:06.520 many different ways if people want to communicate and everybody 0:11:06.559 --> 0:11:08.959 has their own unique preferences. We're out there working with 0:11:09.920 --> 0:11:11.720 you know, our partners and our employees to try to 0:11:11.720 --> 0:11:12.520 make that all possible. 0:11:12.520 --> 0:11:15.439 Well, we talk about transparency, right, or making sure that 0:11:15.480 --> 0:11:17.520 financial systems are fluid and they work really well. Like 0:11:17.559 --> 0:11:18.800 this is a part of it, right. It's kind of 0:11:18.800 --> 0:11:20.520 a cog in the in the wheel, if you will, 0:11:20.559 --> 0:11:21.360 in terms of doing so. 0:11:21.920 --> 0:11:23.360 Thanks so much. Thanks for inviting us here. 0:11:24.040 --> 0:11:25.680 Really cool stuff and I'm glad you could join us. 0:11:25.720 --> 0:11:27.720 Yeah, it's really fun to be here. We would like 0:11:27.760 --> 0:11:29.120 to be outside though, it's really beautiful. 0:11:29.400 --> 0:11:31.640 Can we work next sure, next year, we'll do it outside. 0:11:32.120 --> 0:11:32.520 Just kidding. 0:11:32.559 --> 0:11:35.520 Steve Steve Smarsh of course, he's founder and chairman of Smarts. 0:11:35.520 --> 0:11:37.840 So we are here at smash Connect in midtown Manhattan. 0:11:37.880 --> 0:11:39.760 I'm Carol Masser along with Tim Stanevik. Life here on 0:11:39.800 --> 0:11:42.959 Bloomberg Business Week. Conversations are continuing. We're going to talk 0:11:43.000 --> 0:11:46.480 more about digital transformation and the role of all of 0:11:46.520 --> 0:11:49.160 it in compliance and managing risk for firms. We're coming 0:11:49.200 --> 0:11:50.840 back right here on Bloomberg Business Week. 0:11:53.160 --> 0:11:56.719 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:56.720 --> 0:11:59.840 live weekday afternoons from two to five pm Eastern list 0:12:00.080 --> 0:12:02.680 on applecar Play and and Broud Auto with a Bloomberg 0:12:02.760 --> 0:12:07.360 Business app, or watch us live on YouTube. 0:12:08.240 --> 0:12:11.320 Well, what is Capital One, Bank, Loomy, the London Stock 0:12:11.400 --> 0:12:15.640 Exchange Group, NUMBERA, MasterCard and HSBC all have in common? Well, 0:12:15.640 --> 0:12:18.800 they're all financial services firms that use Amazon Web Services, 0:12:18.800 --> 0:12:21.720 also known as AWS. Our next guest knows that because 0:12:21.760 --> 0:12:24.480 he leads the worldwide business and market development efforts for 0:12:24.600 --> 0:12:27.679 financial services at AWS, having also been an executive director 0:12:27.679 --> 0:12:31.040 at JP Morgan Chase, also working at NASDAQ, bear Stearns 0:12:31.240 --> 0:12:34.320 and City. John Kain is head of financial Services market 0:12:34.360 --> 0:12:37.440 Development at AWS, and he joins us on location here 0:12:37.480 --> 0:12:39.480 at smash Connect. John, how are you good? 0:12:39.559 --> 0:12:40.400 Thanks? Hey? 0:12:40.440 --> 0:12:42.720 How's how's business right now? 0:12:43.040 --> 0:12:46.240 That's pretty good. It's hard to imagine. We're actually in 0:12:46.280 --> 0:12:50.280 the second decade of cloud adoption in financial services, and 0:12:50.360 --> 0:12:52.839 some of the things when I joined AWS seven years 0:12:52.880 --> 0:12:55.640 ago that we wouldn't have thought were possible at all 0:12:55.800 --> 0:12:57.400 to kind of run in the cloud from a financial 0:12:57.400 --> 0:13:01.480 services infrastructure perspective are almost becoming sort of everyday story. 0:13:01.600 --> 0:13:04.080 Did you not think it was possible because of regulatory issues? 0:13:04.320 --> 0:13:05.920 That was one of the big concerns when we had 0:13:05.920 --> 0:13:08.839 those initial conversations from customers earlier in the day, it's like, 0:13:08.880 --> 0:13:11.360 how would our regulators think about cloud? About security? What 0:13:11.360 --> 0:13:14.559 about compliance and resilience? And over the course of the 0:13:14.640 --> 0:13:18.079 last decade, you've seen some of the most important systems 0:13:18.240 --> 0:13:20.760 actually move and run on the cloud. Was two years 0:13:20.760 --> 0:13:24.400 ago that Nasdaq moved its matching engine onto AWS Technology 0:13:24.720 --> 0:13:28.000 runs MREX their Options exchanged. Last year, the SEC gave 0:13:28.040 --> 0:13:31.560 a no objection letter to the Options Clearing Corporation to 0:13:31.600 --> 0:13:34.000 move their risk and settlement systems to the cloud. And 0:13:34.040 --> 0:13:36.080 those are the type of crown jewels in the industry 0:13:36.160 --> 0:13:39.440 that you are always aspire to run. And I think 0:13:39.440 --> 0:13:41.320 that was a twinkle in our eyes when we started 0:13:41.400 --> 0:13:44.520 on the financial services side of ABS, and now it's 0:13:44.559 --> 0:13:46.560 sort of the reality of what we're bringing to the industry. 0:13:46.679 --> 0:13:48.679 I mean safe to say, John, when we break down 0:13:48.720 --> 0:13:51.480 like Amazon earnings, we talked about AWS. It's like streaming, right, 0:13:51.520 --> 0:13:53.680 and we're talking about the cloud. And I think so 0:13:53.800 --> 0:13:56.200 much of general consumers that's what they think about. How 0:13:56.240 --> 0:13:58.040 much of what you do in the cloud is financial 0:13:58.080 --> 0:13:58.840 services based? 0:13:59.000 --> 0:14:01.600 Well, for me it's a hundred percent, right, Yeah, But 0:14:01.920 --> 0:14:04.480 for AWS, it's a large chunk of your business. We 0:14:04.480 --> 0:14:07.720 don't break down the individual segment, but financial services is 0:14:07.760 --> 0:14:10.079 just one of the largest consumers of technology, as you 0:14:10.080 --> 0:14:13.080 can imagine, of course, and just because so much of 0:14:13.120 --> 0:14:15.160 what they do is just moving one than the Euros 0:14:15.200 --> 0:14:18.840 and data around. Almost everything is dependent on technology, and 0:14:18.880 --> 0:14:21.480 when we look at where our customers are focused, it's 0:14:21.520 --> 0:14:27.360 bringing more personalized experience with less friction and bringing down 0:14:28.720 --> 0:14:31.480 the kind of costs across the industry. 0:14:31.640 --> 0:14:33.520 I just want to jump in with a red headline 0:14:33.520 --> 0:14:36.480 crossing the Bloomberg terminal has to do with Boeing. The 0:14:36.520 --> 0:14:40.440 Boeing whistleblower is set to testify an April seventeenth Senate hearing. 0:14:40.800 --> 0:14:44.360 That Boeing hearing has been confirmed by a spokesperson for 0:14:44.720 --> 0:14:48.000 Center Blumenthal checking in on shares of Boeing right now 0:14:48.360 --> 0:14:52.640 in the after hours. Shares of Boeing right now moving well, 0:14:52.800 --> 0:14:55.240 really unchanged as we speak, but did fall about one 0:14:55.280 --> 0:14:55.960 percentage right. 0:14:55.960 --> 0:14:57.960 We had some news earlier today in terms of Boeing 0:14:57.960 --> 0:14:59.400 deliveries getting. 0:14:59.160 --> 0:15:00.760 Back there on percent today. 0:15:00.760 --> 0:15:02.280 Excuse me, all right, good to know, JOHNKM. 0:15:02.280 --> 0:15:04.360 We're talking with the head of Financial Services Market Development 0:15:04.400 --> 0:15:07.720 over at AWS what are like some of the top 0:15:07.760 --> 0:15:09.800 priorities that clients come to you and say, here's what 0:15:09.800 --> 0:15:11.280 we need to make sure that you know we're going 0:15:11.320 --> 0:15:13.440 to play with you in your cloud, in the in 0:15:13.480 --> 0:15:16.880 the Amazon Cloud or AWS, and just what is top 0:15:16.920 --> 0:15:19.280 of mind for them in terms of security and risk 0:15:19.320 --> 0:15:20.000 and compliance. 0:15:20.640 --> 0:15:23.360 So I think it's that's the secondary concern. If we 0:15:23.360 --> 0:15:26.920 think about sort of why firms adopt cloud first, it's 0:15:26.960 --> 0:15:29.640 to change the business dynamic. Right. It moves them from 0:15:29.760 --> 0:15:32.680 having to make three and five year capital investments to 0:15:32.720 --> 0:15:34.800 be able to buy what they need when they need it, 0:15:34.840 --> 0:15:37.000 only pay for it. And when you think about. 0:15:36.800 --> 0:15:39.640 Like the desert versus on premise enterprise exactly. 0:15:39.400 --> 0:15:42.640 And when you think about something like mortgage refinancing, right, 0:15:42.960 --> 0:15:45.720 being able to tie your business costs to the volume 0:15:45.720 --> 0:15:47.840 of business you do as opposed to an investment you 0:15:47.840 --> 0:15:49.720 made three years ago, it allows you to be more 0:15:49.800 --> 0:15:52.720 dynamic from a product and services perspective, right, So it 0:15:52.800 --> 0:15:55.600 changes the way you think about your business. But security 0:15:55.600 --> 0:15:58.200 and operational resilience are table stakes for us to be 0:15:58.240 --> 0:16:02.040 successful in the industry. Right, primary focus above all else 0:16:02.120 --> 0:16:05.240 is making sure our customers are secure and their data secure, 0:16:05.520 --> 0:16:08.240 and that our systems are running as close to perfect 0:16:08.240 --> 0:16:09.400 as possibly can be, but. 0:16:09.360 --> 0:16:10.960 It also means that you guys are taking on that 0:16:11.000 --> 0:16:11.760 capex risk. 0:16:12.160 --> 0:16:12.400 Yeah. 0:16:12.440 --> 0:16:15.040 Absolutely. One of the benefits though, kind of being at 0:16:15.040 --> 0:16:17.240 our scale and our approach to the business is the 0:16:17.320 --> 0:16:19.480 larger you are, the more you have that ability to 0:16:19.560 --> 0:16:23.160 kind of work demands across industry segments and they offset 0:16:23.200 --> 0:16:24.760 each other. And if you're very much thinking about from 0:16:24.800 --> 0:16:27.160 a financial services perspective, it's a little bit like what 0:16:27.240 --> 0:16:29.480 a clearing house or clearing broker brings to the table. 0:16:29.600 --> 0:16:32.120 If they have some customers or long positions, some customers short, 0:16:32.280 --> 0:16:35.320 they can manage that risk better than any one participant can. 0:16:35.480 --> 0:16:37.920 And from a technology perspective, we take advantage of that 0:16:38.000 --> 0:16:39.760 kind of scale to be able to do the same 0:16:39.800 --> 0:16:40.960 thing on behalf of our customers. 0:16:41.080 --> 0:16:43.800 Is Jenai Generative AI changing any of that, because you know, 0:16:43.840 --> 0:16:46.600 we've been having discussions kind of back in our newsroom 0:16:46.640 --> 0:16:48.920 about the on premise enterprise and whether or not they're 0:16:49.000 --> 0:16:51.800 going to be companies, whether it's financial or otherwise that 0:16:52.040 --> 0:16:53.640 are going to do kind of a hybrid approach and 0:16:53.680 --> 0:16:56.640 want to have some facilities on site that maybe there 0:16:56.680 --> 0:16:58.760 is some data information or processing that they want to 0:16:58.840 --> 0:17:01.040 keep kind of closer to home versus tapping the cloud, 0:17:01.040 --> 0:17:03.480 and I'm curious how that is impacting your discussions you 0:17:03.480 --> 0:17:04.399 guys are having around that. 0:17:04.560 --> 0:17:06.600 Yeah, I think in a different way. So almost all 0:17:06.600 --> 0:17:09.280 our customers start on premises, and we have to work 0:17:09.280 --> 0:17:11.680 with them from a hybrid perspective to help them take 0:17:11.680 --> 0:17:13.480 advantage of the cloud, and we want to make that 0:17:13.560 --> 0:17:17.199 infrastructural is transparent to their existing infrastructure as possible. I 0:17:17.200 --> 0:17:19.679