Discussions at this year’s TradeTech conference cover a wide range of subjects important to capital markets. In addition to the inevitable debates around high frequency trading (HFT) or transaction cost analysis (TCA), we can anticipate discussion about reference data, socially-powered algorithms, multi-asset execution and order management systems.
A common thread will be the sheer volume of data that each of these practices either uses or produces. As trading adopts ever-more sophisticated forms of technology, the regulatory requirements surrounding the storage and analysis of data will increase. We believe this will create an unprecedented drive for financial services firms to store and process data in an ever-more efficient and cost-effective manner.
Firms face a choice. Either to store data on-premise in their ‘comms room’, outsource to a data centre / colocation facility, or a combination of both. It all depends on the business model of the firm, the ambition of anticipated growth and the scale of required data handling. At Volta, our discussions with financial services firms weighing up comms rooms versus data centre options broadly cover the following requirements:
- Technology & Expertise: The amount of in-house technology combined with the on-going human resources to provide 24 x 7 physical infrastructure management and support can represent a considerable cost. Costs that might be better deployed to the core revenue-generating function of the firm.
- Resilient power: IT infrastructure and data management place a huge demand on facilities in terms of power and cooling and the costs to deliver a resilient infrastructure can be prohibitive. Access to a resilient and diverse power supply is critical to minimise any potential down-time. For example, our tier 3 Central London facility in Great Sutton Street offers diverse 33kV power supply of 9.6MW from two independent substations of the national grid.
- Diverse low-latency connectivity: Domestic and international links are important when accessing global financial markets and firms are looking for diverse carrier feeds to ensure the fastest, most effective trading routes and data feeds. Connecting these feeds into in-house facilities can be a challenge, whereas data centres have multiple carriers with diverse links already in place.
- Flexibility & Scalability: Heads of Technology are considering how to handle the scale and inevitable growth of data. Scaling up at the right pace can be a gamble. Empty facilities waiting to be filled cost money. Overfilled spaces run the risk of being adversely impacted by operating in sub-optimum conditions.
- Security & Location: What types of data should be kept on-site? What can be housed in an outsourced data centre? Regulatory and security obligations tend to underpin these discussions and we have seen a lot of interest from firms attracted by the convenience of our central London location, our security procedures and protocols, as well as the choice of connectivity and resilient power.
As firms are considering their data management strategies, they are considering how to support and serve the growth at the right pace and in a way that will immunise them against over-investment in order to stay on top of technological developments. Whether this is an in-house, outsourced or a hybrid approach, TradeTech will be a-buzz with debate about how traders need to innovate and adopt technology, and core to this will be how they approach data management.