Harnessing Real-Time Financial Data with Amazon MSK and Apache Flink: A Game-Changer for Capital Markets

As an AWS Partner, Advanced Tier Services and Solution Provider we experiment and build solutions addressing real-world challenges. This challenge was to build a solution to harness real-time financial data using AWS services and then work out what else could be built. 

In the high-stakes world of finance, real-time data is no longer a mere luxury, it’s a game-changer. Whether it's stock market fluctuations, commodities pricing, or global economic indicators, financial institutions thrive on instant access to high-quality data. 

But here’s the challenge! 

Traditional data pipelines often struggle to keep up with the demands of high-frequency trading (HFT), risk analysis, and compliance monitoring. Is there any solution for it? 

There was a time when processing millions of financial transactions per second with zero downtime looked like a beautiful dream. But now it's a reality! 

Welcome to the new era of real-time financial data processing, where Amazon MSK and Apache Flink are changing the game for capital markets. 

50% of the world's leading financial institutions will rely on cloud by 2028. - Gartner

Today, milliseconds can mean the difference between profit and loss! That's why Gartner predicts that more than 50% of the world's leading financial institutions will rely on cloud-based streaming solutions by 2028, accelerating their business initiatives. 

Financial Data Revolution – Why Real-Time Matters Now More Than Ever? 

Imagine trying to navigate the stock market without real-time data. It would be like driving blindfolded on a freeway—dangerous, chaotic, and bound to end badly. 

That’s where financial data feeds come in. These live streams track stock movements, foreign exchange rates, derivatives, and key economic events, ensuring that traders, analysts, and institutions have up-to-the-second insights to make informed decisions. 

Do you remember the days when end-of-day batch processing was enough? Those days are long gone. Today's financial landscape moves at lightning speed with: 

• Over 70 billion market data messages are processed daily on major exchanges 
• Sub-millisecond trading decisions becoming the norm 
• Real-time risk assessment becoming a regulatory requirement 

Today, the industry is undergoing a major shift toward cloud-based solutions, and AWS is leading the charge. With its ability to process vast amounts of financial data at lightning speed, AWS is becoming the go-to platform for everything from high-frequency trading to real-time risk management. 

By building our data platform with AWS and Sourced, we've acheived near real-time views on e-payment settlements, significantly reducing risk, uncovering new opportunities, and enhancing operational support. - Kenny Tse, Head of Data Lake at Payments Network Malaysia

Experts are assessing the exponential growth of financial data and comparing the power of data processing with and without AWS. They believe that the traditional infrastructure can no longer keep up with the modern needs and scalability requirements. 

We were able to easily support the jump from 30 billion records to 70 billion records a day because of the flexibility and scalability of Amazon S3 and Amazon Redshift. - Robert Hunt, Vice President of Software Engineering, Nasdaq

Why Financial Institutions Are Moving to AWS 

• Infrastructure Flexibility: Traditional on-premise data pipelines require extensive setup, while AWS offers on-demand scalability with zero hardware management. 
• Reduced Latency: AWS’s distributed architecture ensures that financial data feeds are processed in milliseconds, critical for algorithmic trading and automated risk modeling. 
• Seamless Data Integration: Financial firms already leverage AWS for storage, analytics, and AI-powered insights, making real-time data streaming a natural fit. 
• Cost Efficiency: By adopting AWS, even small and mid-sized financial firms can compete with industry giants, eliminating the need for costly proprietary data infrastructure. 

To meet this growing demand, Amazon MSK and Apache Flink provide a robust, scalable, and low-latency streaming architecture that transforms financial data processing. 

Deployment – The Bridge to Success 

Before diving deep into the technicalities, let's address one crucial aspect: deployment. 

Successful real-time data streaming isn’t just about technology — it’s about how seamlessly it integrates into existing financial ecosystems. Many firms struggle with deployment bottlenecks that slow down their transition to cloud-based solutions. 

Enterprises, CTOs, and COOs are impressed with how their existing infrastructure was seamlessly deployed and integrated with AWS services. From managing proof-of-concept to production, they achieved remarkable success. 

AWS simplifies the deployment process by providing pre-configured, managed environments that eliminate operational overhead. 

With Amazon MSK and Apache Flink, businesses are streamlining their deployment concerns, ensuring their finances are properly focused on real-time insights rather than mere infrastructure management. 

Apache Kafka: The Backbone of Real-Time Event Streaming 

Before understanding Amazon MSK, let’s learn the core technology behind it—Apache Kafka. 

What Is Apache Kafka? 

Apache Kafka is a distributed event streaming platform designed for high-throughput, real-time data processing. It allows organizations to ingest, store, and process large-scale data streams from multiple sources, making it an ideal choice for financial data feeds. 

Originally developed by LinkedIn and now an open-source industry standard, Kafka is widely used across trading firms, stock exchanges, and fintech companies for its scalability, durability, and fault tolerance. 

Key Features of Apache Kafka for Financial Data Processing 

• Event-Driven Architecture: Kafka enables real-time ingestion and distribution of financial data, ensuring insights are delivered instantly. 
• Scalability: Kafka handles millions of messages per second, making it ideal for high-frequency trading (HFT) and live financial analytics. 
• Data Durability & Fault Tolerance: Kafka persists data across multiple nodes, ensuring zero data loss—even during failures. 
• Efficient Streaming at Scale: Kafka supports partitioned message streaming, allowing it to process data in parallel, improving efficiency. 
• Seamless Integration: It integrates with Flink, Spark, OpenSearch, and other analytics engines, enabling real-time data transformation and enrichment. 

However, while Kafka is powerful, managing it on-premises requires significant infrastructure, engineering expertise, and operational maintenance—which can be a bottleneck for financial firms. 

That’s where Amazon MSK simplifies Kafka deployment. 

Apache Flink – Where Data Comes to Life 

But streaming data is only half the battle. Apache Flink transforms this raw data into actionable insights in real time. 

Organizations using Apache Flink for real-time financial data processing have seen a 40% reduction in data latency, which has significantly improved trading and risk assessment strategies.

Flink has the ability to reduce processing latency compared to batch processing; it can handle state sizes up to several terabytes and can support complex event processing with sub-millisecond latency protocol. 

Amazon MSK: The Fully Managed Kafka Solution for Financial Data 

Amazon Managed Streaming for Apache Kafka (Amazon MSK) is a fully managed service that eliminates the complexity of setting up, maintaining, and scaling Kafka clusters. 

For financial institutions, Amazon MSK provides a scalable, secure, and highly available Kafka environment, making real-time data streaming easier than ever. 

Amazon MSK is more like a data highway system with no traffic jams. It can deliver up to 3x more throughput per broker, scale up to 20x faster, and reduce recovery time by 90% compared to standard Apache Kafta.

Why Financial Institutions Choose Amazon MSK 

• Zero Infrastructure Management: AWS automates cluster provisioning, patching, and maintenance, eliminating DevOps overhead. 
• Seamless AWS Integration: MSK integrates natively with Amazon S3, OpenSearch, Apache Flink, and Redshift, enabling real-time analytics and historical data storage. 
• High Availability & Security: MSK offers built-in encryption, IAM authentication, and multi-AZ replication, ensuring data integrity. 
• Auto-Scaling: MSK automatically scales based on demand, ensuring low-latency performance during market spikes. 
• Cost-Effective Pricing: Unlike traditional Kafka setups, MSK operates on a pay-as-you-go model, reducing infrastructure costs. 

By leveraging Amazon MSK, financial firms can stream live market data, ensuring traders, analysts, and risk managers get instant, enriched insights without operational complexity. 

Amazon Managed Service for Apache Flink: Real-Time Data Processing and Enrichment 

While Amazon MSK ensures real-time data ingestion, financial firms need real-time processing and enrichment and that’s where Apache Flink excels. 

Apache Flink is a stream-processing powerhouse, offering: 

Stateful Processing: Flink maintains event state, ensuring that calculations (e.g., moving averages, price fluctuations) persist. 

Event-Time Semantics: Unlike batch processing, Flink processes financial data in true real time, ensuring instant insights. 

Machine Learning & Anomaly Detection: Financial firms use Flink to identify fraud, detect market trends, and automate trading strategies. 

Seamless Integration with Kafka: Flink ingests streaming data from Kafka, processes it, and sends enriched data to downstream applications. 

With Amazon Managed Service for Apache Flink, AWS makes deploying Flink applications serverless, eliminating operational complexity while enabling financial institutions to process live data at scale. 

Use Case: Enriching a Real-Time Stock Market Feed 

Let’s explore how financial institutions can enrich real-time market data using Amazon MSK and Apache Flink. We built it. 

Solution Overview 

1. Raw Market Data Ingestion: A Python application running on an Amazon EC2 instance fetches stock quotes from Alpaca’s financial API.

2. Streaming Data via Amazon MSK: The raw stock data is published to a Kafka topic within the Amazon MSK cluster. 

3. Real-Time Processing with Apache Flink:

• Flink detects market trends and adds alerts when prices exceed a threshold. 
• The enriched data is published to a new Kafka topic in MSK. 

4. Persistent Storage in Amazon OpenSearch Service:

• The enriched data is stored in Amazon OpenSearch, allowing traders to query historical insights. 

5. Secure Data Consumption via AWS PrivateLink:

• A Kafka consumer application running in a separate AWS account (customer’s VPC) securely consumes the enriched data feed. 

And this is the architecture. 

The combination of Amazon MSK and Apache Flink is particularly powerful because: 

• MSK provides fully managed Kafka for reliable data streaming 
• Flink offers low-latency processing with exactly-once semantics 
• Both services scale automatically with demand 
• Native AWS integration simplifies deployment and operations 
• Cost-effective for both small and large-scale implementations 

Use Cases 

There are many business use cases for this combination of technologies, for example: 

1. Real-time Fraud Detection - unusual transaction locations, rapid successive purchases, or amount threshold violations 
2. Real-time Customer Experience Analytics 
3. Supply Chain Optimization 
4. Social Media Sentiment Analysis 
5. Dynamic Pricing Systems 
6. IoT Device Monitoring and Predictive Maintenance 
7. Real-time ETL and Data Lake Updates - enabling fresh data for downstream analytics 
8. Application Performance Monitoring 
9. Network Security Monitoring 

NETSOL: Your Partner in Real-Time Data Transformation 

While AWS provides the technology, implementing a real-time data pipeline requires deep expertise in Kafka, Flink, and data workflows. 

At NETSOL Technologies, we help institutions: 

• Deploy and optimize AWS-powered real-time data feeds 
• Enhance trading, risk management, and compliance with AI-powered insights 
• Seamlessly integrate AWS data solutions into existing platforms 

Ready to Elevate Your Data Strategy? 

Let’s Talk! Book a consultation with our AWS and data experts today. Let’s build together.