THE IMPACT OF IT INFRASTRUCTURE ON LOCAL TRADING EXCHANGES

Dieter Lott, vice president business development at Avnet Technology Solutions EMEA discusses how revolutionary technology has the ability to impact the operations behind Europe’s prestigious Stock Exchanges

We are currently in an age of change within the finance sector. Recent reports have shown that the finance sector is making record investments in technology, as the global investment in financial technology approaches $500billion this year. Europe alone is contributing to over one quarter of this investment at $142billion by the end of 2015. Digital banks and mobile payment technologies are the solutions that seem to be making the most headlines, so it’s relatively easy to forget the important role technology plays in the background operation of wider financial exchanges and institutions, despite stocks and shares being an extremely high profile and lucrative business.

IT infrastructure plays a vital role in the stability of local trading exchanges across the world – from London, to New York, through to Frankfurt and Prague. From a digital perspective, increased financial infrastructure resilience within a country’s trading exchange will make local companies more resilient, which in turn has a positive and stabilising effect on the economy. An optimum level of IT infrastructure reliability is arguably more important for a country’s financial exchange than other industry sectors, as it needs only go down for one day or less to have an impact on the country’s economy and to create panic at trading desks. As the modern day risk of cyber attacks grows exponentially too, it is critical for a trading institution to have complete confidence in its IT infrastructure and back-up systems.

To address common issues like downtime and resiliency, one European trading exchange – the Prague Stock Exchange – has upped its game in terms of IT infrastructure. In Czech Republic, Avnet recently worked with IBM and IMPROMAT-COMPUTER to deploy an IBM PureFlex hybrid installation at the Prague Stock Exchange – the first of its kind in the Central and Eastern European (CEE) region.

This advanced solution has enabled the Prague Stock Exchange to modernise its existing systems and servers to improve the speed of execution of trade transactions and data storage. The IBM PureFlex hybrid solution improves data storage, management and monitoring of servers and applications, drives operational efficiency to deliver cost reductions and lower latency on the Stock Exchange’s networks.

Trading exchanges also generate a huge amount of information, all of which needs to be stored and protected. This can cost organisations plenty of time and money, as their IT infrastructure solution needs to employ a large number of disks and special access control techniques. Another benefit of the Prague Stock Exchange‘s recently installed solution is its capacity for disk array sharing across multiple servers with different operating systems – allowing for significantly improved system uptime. Greater system uptime means less disruption and heartache for the trading floor.

When you’re making an IT decision on such a grand scale as this, it’s important to know that your chosen solution will hold significant business benefits for the future. The IBM PureFlex’s 100 percent readiness for cloud and enablement of unified management and monitoring, ensures the Prague Stock Exchange’s system can be updated as new advancements and needs become apparent.

There has been some debate around whether trading exchanges will benefit more in future from a nearby back-up location or outer-city location. The IBM PureFlex solution operates between the Prague Stock Exchange’s headquarters and its back-up location situated nearby, as the more established situation. This is because the further away the backup is, the harder it is to keep both copies of the data perfectly synchronised. Yet, with today’s threats coming from cyber attacks, such as the threat feared to have struck the New York Stock Exchange (NYSE) this summer, some industry experts have begun to pose the argument for a geographically separate location to protect important financial data.

Other drivers for choosing a suitable infrastructure solution for complex organisations, such as a trading exchange, include efficiency and maximum operational cost savings. In terms of the Prague Stock Exchange’s solution, the need for substantial savings in the operating costs of the application infrastructure running on older systems and servers was paramount.

Exchanges are a critical link within the financial services sector. It therefore comes to reason that technology investments on this scale should be recognised with the same level of impact as the consumer focused financial technology advancements. IT infrastructure continues to become more advanced through hybrid solutions such as IBM PureFlex, giving trading exchanges the opportunity to streamline their operations like never before. I can only see this becoming an even more important focus as the financial world wakes up to the business benefits that a more efficient system offers. Cost reductions, lower latency and greater uptime on the network are but a few of the improvements a hybrid solution can bring to the trading desk.

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