Vanguard's Journey to Modernize Its Mission-Critical Trading Platform

Overview

• Vanguard is a global asset and wealth manager with over 50 million clients worldwide, managing $9.9 trillion in assets.
• Vanguard is heavily dependent on technology, with over 99% of client interactions happening through digital channels.
• Vanguard has undergone a significant modernization journey to transform its mission-critical trading platform from a legacy, monolithic on-premises system to a cloud-based, distributed architecture.

Drivers for Modernization

• Increasing trading volumes: Vanguard has seen a 100x increase in brokerage trading volume over the last 15 years and expects another 100x increase in the future.
• Scaling new business offerings: Vanguard has been scaling its advisory services, robo-advisory, and tax-loss harvesting offerings, which put significant demands on the trading platform.
• Responding to industry changes: The brokerage industry has seen the rise of ETFs, the elimination of commission fees, and the impact of events like the "meme stock" craze, all of which required Vanguard to adapt.

Modernization Goals and Outcomes

Vanguard focused on five key goals and outcomes for the modernization:

1. Improve scalability to handle increased trading volume and spikes in activity.
2. Enhance resilience and availability to meet a higher bar for system reliability.
3. Deliver new features and improvements to the investor experience faster.
4. Increase customer satisfaction by making the platform simpler and easier to use.
5. Reduce the total cost of ownership while scaling the business.

Modernization Approach

• Vanguard took an incremental, value-driven approach to modernization, focusing on delivering value early and often.
• The modernization journey began with the front-end client experience, building a new equity and ETF trade ticket.
• Vanguard then focused on building a layer of cloud-based APIs to abstract the legacy systems, allowing the front-end and backend to modernize independently.
• The next step was to migrate the database layer from on-premises to the cloud, using a mix of Amazon Aurora PostgreSQL for the relational database needs and Amazon DynamoDB for the key-value lookup requirements.
• Throughout the journey, Vanguard leveraged AWS services like Amazon ECS and Fargate for the compute layer, and worked closely with AWS to enhance the capabilities of services like Amazon Aurora Global Database and Amazon DynamoDB Global Tables to meet their resiliency and availability requirements.

Outcomes and Lessons Learned

• Vanguard has seen significant improvements in system availability, latency, observability, and the ability to deliver new features and capabilities faster.
• The modernization journey has been a multi-year effort, and Vanguard emphasizes the importance of thinking big, remaining flexible, and delivering value incrementally.
• Vanguard's experience highlights the importance of carefully evaluating the right fit-for-purpose data stores, compute technologies, and messaging platforms to meet the evolving needs of a mission-critical application.

Overall, Vanguard's journey demonstrates the challenges and benefits of modernizing a complex, mission-critical system in the cloud, and provides valuable lessons for other organizations facing similar modernization efforts.