The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

The Rise of Cloud Computing Within the Financial Trading Sector

Mainstream cloud adoption across the financial vertical initially started with buy- and sell-side trading firms needing an accessible platform scalable enough to store their immense volumes of market data and run risk analyses or other algorithms.

The cloud was chosen as the logical solution, satisfying the security, compliance and low latency requirements associated with such off-line quantitative analysis. In order to gain speed to market and have increased flexibility, today’s trading firms, exchanges and service providers require a more rich set of applications and services as well as high-performance computing solutions that are fast, reliable and offer low latency.

As the financial vertical evolved, cloud computing became a useful and cost-contained tool for trading firms with multiple infrastructures. It made sense for firms to utilise cloud-based IT platforms in order to trade, as long as their trading strategies did not require ultra-low latency – strategies such as Over-the-Counter (OTC) foreign exchange, options and derivatives – as opposed to buying additional infrastructure to deploy their trading strategies.

Another reason financial firms are turning to cloud computing is to keep IT expenditures to a minimum. As a result of the recent economic downturn, financial firms are dealing with tightened IT budgets. This, however, does not subside the constant pressure to bring new products to market to keep up with high-speed trading, consumer demand and ever-changing technological innovation. Each and every financial enterprise is interested in growing its profitability while simultaneously enhancing its services to clients.

The cloud has been instrumental in creating more revenue opportunities and increased trade volumes for financial firms. One example is adopters on the exchange side, who began deploying and charging a fee for the use of their own cloud platforms and market data licensing – creating two additional revenue streams to add to their already established co-location products.

Cloud is proving to be a win-win for both exchanges and financial trading firms.

FiberMedia Group has recently been working with buy-side and sell-side firms in its Secaucus, NJ and Westchester, NY data centres to deploy a cloud platform that allows firms to take advantage of market data in the cloud, access financial extranets and provide a one-stop-shop solution for firms looking to do test and development and eventually trade in the cloud. FiberMedia’s Financial FlexCloud is a solution designed for financial professionals by financial professionals – making it a perfect fit for financial trading in the capital market space and offering a number of benefits to financial trading firms.

With its infrastructure and connectivity to various service and liquidity providers already in place, Financial FlexCloud offers excellent reach as well as lowered time across capital markets. FiberMedia’s Secaucus, NJ and Westchester, NY data centres have excellent geographical proximity to a variety of financial institutions, while their Chappaqua, NY data center is conveniently located near a number of buy-side firms.

The Financial FlexCloud also converts large, up-front capital expenditures (CapEx) into more predictable operating expenditures (OpEx) – all the while leveraging the best-in-class infrastructure at nearly 25% of the cost of traditional hosting solutions

For more information about FiberMedia’s FlexCloud, visit www.fibermedia.net/services/flexcloud/

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