A novel architecture for financial investment services on a private cloud

Abstract

One of the important paradigms in Cloud computing is Software as a Service (SaaS). Saas has been provided by many cloud vendors for different applications. One of the application that has not been explored is financial investment. In this work, we propose an architecture for a SaaS model that provides service to financial investors who are not familiar with various mathematical models. Such finance models are used to evaluate financial instruments, for example, to price a derivative that is currently being traded before entering into a contract. An we consider a situation of an investor approaches the Cloud Service Provider (CSP) to price a particular derivative and specify the time, budget, and accuracy constraints. Based on these constraints specified by investors, the service provider will be able to compute the option value using our model proposed in this study. To evaluate our proposed model, we compared pricing results with the classical model that provides a closed-form solution for option pricing. After establishing the accuracy of our pricing results, we further ensure that the Service Level Agreement (SLA) between the Financial SaaS Provider (FSP) and the investors is honoured by meeting the constraints put forth by the investors. © Springer International Publishing Switzerland 2013.