Move to the Cloud for High-Performance Trading and Execution

The cloud is rapidly becoming the go-to for FinTech start-ups, driving and supporting innovation on electronically traded markets. Traditional financial trading firms, from exchanges and data vendors, to brokers, hedge funds, and even proprietary trading firms, are rapidly embracing cloud computing, but how effective is it for high-performance execution? Jeff Mezger, Vice President of Product Management at TNS, considers the challenges and opportunities when embracing a cloud strategy for low-touch to no-touch trading strategies. 

Firstly, firms need a clear strategy for cloud implementation and the right people, with the right skills to facilitate an effective transition. The cloud can be cost effective to put data in and keep it there, however, taking data out is expensive. Many customers look at the cloud as something that makes business simpler and lowers costs, but firms still need to understand how to operate in a business-as-usual capacity, while simultaneously adopting cloud services where appropriate. If this is not a core competency, valuable time and resources will be used in-house trying to figure it all out.

Public cloud services are great for big data analysis and help financial firms store, move, and manage large amounts of data, allowing them to make more informed trading decisions through effective data analysis. It is also good for transferring large volumes of data between regions, like London and New York, and can support adherence to different regulatory requirements, for example, by enabling real-time monitoring of trading activity. The nature of cloud-delivered services also enables ‘dial-up’ resource on demand, to innovate and pivot to a new initiative when needed, while creating alternative options for ensuring operational resilience.

The cloud is not one general thing; there are different factors to consider, especially geography. Different providers have physical locations from where their cloud solution operates, so understanding that there is a geographic element to any cloud offering is fundamental. Most trading strategies require a highly resilient and scalable infrastructure. Many factors can affect low latency trading(https://tnsi.com/solutions/financial/connectivity/), especially hardware location, the number of network hops, deterministic network latency, the hardware specification, and the resiliency of an infrastructure’s architecture, including both the scale and power of network connectivity.

Large scale public cloud providers may currently struggle to accommodate the particular needs of low-latency electronic trading and co-located infrastructure required by electronic traders. So, typically traders have used the cloud for less latency-sensitive purposes, like risk management, data storage, development work and modelling new strategies.

TNS Cloud – Server Management, is a breakthrough end-to-end solution that aims to bring the benefit of cloud to low-latency trading infrastructures and co-location environments. It delivers a full-suite of trading infrastructure and support to buy- and sell-side institutions and their vendors. Designed for high-performance exchange trading, utilizing TNS’ bare metal servers and ultra-low latency trading connectivity, TNS Cloud – Server Management combines the company’s Dedicated Server hosting capabilities with hands-on server management. This end-to-end offering helps to dramatically reduce clients’ trading center complexity and costs, allowing firms to focus their human resources on mission-critical business goals and go-to-market opportunities.

 

“Up until now, trading organizations often outsourced cloud data center services, but still had to manage their own server resources. With this new Server Management, paired with TNS’ established co-location capabilities, we’re reducing complexity and breaking new ground by providing both infrastructure and end-to-end server management.” Jeff Mezger, Vice President of Product Management at TNS.

 

Traders are racing toward enhanced cloud adoption. However financial institutions need to be strategic in their approach to transitioning to the cloud, in order to maximize the benefits and continually review and revise their adoption decisions. They need to consider working with experts as this will ensure that, as technology evolves, today’s choices remain appropriate and adaptable to a dynamic future.

Jeff Mezger is Vice President of Product Management at TNS with responsibility for its managed services for the financial industry. He oversees product development and strategy for market data, online and data center services.  

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