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When Time is Money in Financial Services

hayden-passon

Bill Mannel 2_Jan 2016.JPGGuest blog written by Bill Mannel, VP & GM – HPC, Big Data & IoT Solutions, HPE Servers

The phrase “time is money” applies today more than ever before in Financial Services, where fractions of a millisecond in transaction processing time can translate into millions of dollars. 

Ben Franklin probably wasn’t thinking about the 21st century when he penned the famous words “time is money”, but he could have been.  In the digital economy, the ability to work faster than your competitors can create a direct and measurable economic advantage. One industry where this plays out every day is Financial Services (FSI), where fractions of milliseconds in transaction processing time can translate into millions of dollars. 

Where time is money

In the time it takes the average person to blink, today’s high-frequency trader can execute over 10,000 trades. Trades can be executed by machine in less than a half a millionth of a second, over one million times faster than the human brain can make a decision1

The trading process itself is in transition. Traders are moving away from program trading and towards a more automated process leveraging machine learning and data analytics where even non-traditional data points like Twitter feeds are being incorporated into decision making. Trading exchanges are providing value-added services like deterministic algorithms. Proprietary trading algorithms are becoming more complex. Trading organizations need to process more data to make better decisions, and they need to do it faster. 

There is probably no industry with a more direct correlation between the speed of technology and revenue – every fraction of a millisecond saved in executing a trade translates into additional revenue. Extreme computing power has not only become a key differentiator in high-frequency trading, but crucial to survival. There’s no such thing as “fast enough”. 

Mission control

The need for speed is not limited to automated trading – it carries over to the work of individual traders and the workstations that support them. 

The typical trader workstation looks like something more suited to monitoring space flight than managing financial transactions. It might include four or more high-definition monitors, each displaying data from multiple graphic-intensive applications, all running simultaneously to allow traders to monitor real-time information from potentially dozens of financial applications and services. 

Meeting this need requires capabilities not inherent in typical workstations, both in terms of standard processing and graphics performance. Every trader has access to the same information – those that come out ahead are those who can detect and react the quickest to market fluctuations. 

Staying compliant

All of these trading transactions must be preserved, along with potentially petabytes of data from a wide variety of other sources. A complex tapestry of regulatory requirements places a substantial burden on IT organizations to retain data safely and to make archived data available for compliance activities. Many institutions find themselves spending too much time and money trying to make traditional storage and backup solutions perform at a speed and scale that they were never designed for. 

Accelerating IT performance

In these three cases, processing power and speed is of the essence. Accelerating IT performance can directly boost your bottom-line. HPE provides products optimized for each of these applications. 

  • HPE Trade and Match server solution leverages HPE Apollo 2000 high-performance computing (HPC) technology, enhanced for high frequency trading environments
  • The HPE Moonshot Trader workstation leverages a built-in GPU to create a workstation that provides the uncompromised graphics performance that traders require
  • HPE Risk Compliant Archiving combines high-density scale-out servers with Scality RING petabyte-scale software-defined storage management and iTernity iCAS certified2 data retention management to meet stringent compliance requirements 

Download this new best practices guide from HPE, Deliver higher revenue and margins with innovative trading solutions, which is designed to help financial institutions learn how to boost bottom-line performance by accelerating these three critical IT processes. Because in Financial Services, Ben Franklin’s advice to a young tradesman is just as applicable today as it was nearly 300 years ago – “Time is money”. 


1How Fast is High-Frequency Trading? Faster Than You Think, Equedia Investment Research, 2015, http://www.equedia.com/how-fast-is-high-frequency-trading/

 2Certified by Cohasset Association and KPMG for storage and audit requirements

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