Upstox Powers High-Speed Trades in Seconds with AWS

Investing in the stock market can be confusing and daunting, not only for first-time traders but for seasoned investors as well. Not to mention, investing can be costly when you consider high brokerage fees which, in India, have become a major barrier for small investors. Enter Upstox, a India-based discount brokerage firm that saw an opportunity for hassle-free trading using design and technology to reduce costs for its customers. The firm refers to itself as a technology-based firm in the financial services space that empowers customers with tools and insights for savvier investment decisions.

It is often said that time is money, especially when it comes to trading. To maintain its customers’ trust and confidence, Upstox has to ensure a consistent high performance of its trading platform so that customers have the information they need at their fingertips to make decision-making easier and faster. Initially, an on-premises trading platform that pulled data from the National Stock Exchange of India and the Bombay Stock Exchange served that purpose, but it proved temporary. As Shrini Viswanath, cofounder and chief technology officer of Upstox, explains, “We started growing rapidly and saw scalability and bandwidth issues on the horizon that could affect our ability to execute trades in seconds.”

To avoid the threat becoming a reality, Upstox decided to move its trading platform to the cloud to gain the scalability and bandwidth required to support expansion. Specifically, the firm turned to Amazon Web Services (AWS), whose Asia Pacific (Mumbai) Region would ensure that data stayed in India, in line with financial regulations. Viswanath notes, “AWS was already well established in the country and offered a wide range of mature services to companies in financial services.”

Before Upstox could press ahead with the migration, it had to fulfil one requirement. Under India’s law, the servers pulling data from the Indian stock exchanges had to remain on premises. “We needed a connection between the servers and the cloud that could handle major trading fluctuations, as data coming in can ramp up by several gigabytes,” says Viswanath.

Upstox found an answer in AWS Direct Connect, an AWS Cloud solution that establishes a dedicated network connection from AWS to on-premises data centers. Viswanath recalls, “With direct access from AWS to servers over a private line, it didn’t matter if trading suddenly fluctuated and market information coming in spiked because AWS Direct Connect offered massive bandwidth to ensure our trading platform would remain unaffected. Customers would get the information they needed in time to make the best trades.”

Besides ensuring Upstox stayed compliant with data regulations, the AWS Asia Pacific (Mumbai) Region also offered Upstox a solution to an upcoming challenge. As Upstox continued to expand, it was crucial that the firm store data in a separate location to ensure business continuity and disaster recovery (DR) and to meet the required data protection levels.

With two AWS Availability Zones in the Mumbai region, Upstox was able to address its DR needs. Moreover, when AWS announced its third availability zone in May 2019, Upstox had its data protection strategy covered. Viswanath says, “We have gained significant savings by avoiding a secondary data center set up. And that doesn’t include the cost of making sure that all the hardware in the data center delivers the same level of reliability that AWS offers. With AWS, we get that elasticity without having to invest in hardware upfront.”

During peak periods when markets open and close, traffic can be volatile—sometimes increasing by threefold or fivefold—with more traders logging in than normal. By using Amazon Elastic Compute Cloud (Amazon EC2) Auto Scaling, Upstox’s platform performance is maintained during those peak periods. Viswanath says, “Our IT needs to be able to respond to those changes instantly—it’s non-negotiable. With Amazon EC2 Auto Scaling, we don’t have to worry about manually scaling our infrastructure to meet an increase in traffic; everything is done for us.”

Previously, Upstox’s trading platform’s applications ran on Amazon EC2 instances, but Upstox has recently started to incorporate serverless services from AWS such as AWS Lambda to run its platform’s charts feature. These charts graphically display price changes, historical highs and lows, and trading volumes. Viswanath comments, “By running our charts on AWS Lambda, the charts are loaded at the same high speed throughout the day, regardless of the number of requests from customers.”

In the same year Upstox migrated to the AWS Cloud, it launched its Upstox Pro Mobile app. Built for both iOS and Android operating systems, the app provides similar functionality to the desktop experience, allowing users to analyze their stock positions and make trades. Thanks to the scalability of AWS, Upstox has been able to meet its continuous growth, with 85 percent of trades placed through its mobile app. “The number of monthly active users jumped by 72 percent in the second quarter of 2020, and app usage has generally increased across the country. We wouldn’t have been able to meet that increase without the flexibility of AWS,” highlights Viswanath.

The cost-effectiveness of AWS solutions also allows Upstox to drive app development. “We use A/B testing to compare customer reactions to new app features, and we store the features to be tested in buckets on Amazon Simple Storage Service (Amazon S3), which provides a low-cost, reliable solution which we can toggle on and off to measure user reactions,” Viswanath adds.

And it doesn’t stop there for the business. In 2019, Upstox launched its high-speed Margin Trading Facility (MTF), where users can activate the MTF in just three clicks and conduct trades in as quickly as 10 seconds. The company is also building out its analytics capabilities using Amazon Redshift for greater insight into customer journeys. Data from across the business—including on its mobile app and website—is stored in Amazon Redshift, with in-house services querying the data for specific views.

Another process Upstox needed visibility into was onboarding users on its website. “We discovered through analyzing data in Amazon Redshift that sign-up processes on our website were slow. We fixed that immediately and conversion rates increased by 5–10 percent,” Viswanath says.

The business is growing at a phenomenal pace and has seen its customer base grow tenfold since June 2018. “We are growing at a fantastic speed, and expect to cross the two million customer mark at the end of 2020. With AWS, our goal is to consistently maintain 99.99 percent platform stability providing information at the highest speed, empowering traders and investors to make accurate decisions at the right time,” Viswanath concludes.