When the economic backdrop shifts, traders often need to adjust in a heartbeat
By Tony Jones, Global Relationship Director at BSO
Smart trading firms have long recognised the value of staying nimble. It can involve trying a new tactic, a new asset class or new geography.
It also can involve a firm’s network strategy.
Will international trade disputes escalate and hit the global economy? How haunting was the recent inversion of the U.S. yield curve? The Bank for International Settlements highlighted risks such as these in its latest bulletin. They are the sort of issues that often demand a complete rethink of a trading strategy.
Many trading firms respond to market uncertainty by designing savvy diversification strategies. Some firms build models that thrive on volatility. However, adapting to new conditions may sometimes have as much to do with how a firm manages its network as to how it manages its trading desk.
Adapt or die
The reason that networks matter so much is simple. At times of peak uncertainty, there is a real premium on flexibility. That extends to the network.
As a result, it is no surprise that Connectivity as a Service (CaaS) and software-defined networking (SDN) are gaining increasing attention amongst the financial markets community.
They both offer increased flexibility for trading firms. Connectivity as a Service allows firms to connect more easily and quickly to new venues. SDN lets them choose new network routes without physical changes.
A massive SDN market
Last year, the global SDN market was estimated to be slightly less than $9 billion. By 2023, it is forecast to reach nearly $29 billion. That is a stunningly fast rate of growth. It underlines just how radically SDN is changing the network space.
KPMG, citing data from a networking survey, recently noted how SDN sits at the top of the priority list for executives who are actively researching new network capabilities.
SaaS & innovation
SDN holds promise for trading firms of any size. But Connectivity as a Service has particular appeal for firms that are relatively young and want a network strategy that can scale.
Consultancy Oliver Wyman pointed out in one white paper the following benefits for firms
No upfront investment in infrastructure
No long-term contracts
Specialised network expertise is not needed.
All of this means that Connectivity as a Service enables firms to focus more on innovation.
The network footprint is key
It’s also worth noting that the value of SDN and Connectivity as a Service can increase based on the footprint of the network provider.
The whole point of having fast, efficient and seamless connectivity is to have as wide an array of options as possible. If firms want to be able to change their trading strategies quickly, they need network providers that are truly global and have the largest numbers of connections.
BSO connects to more than one hundred data centres in 23 countries around the world. So, we’re confident that the network options we provide our clients will offer the flexibility they will need – whenever markets start to gyrate.
No one knows what the global economy or the markets are about to do next. But it’s a pretty safe bet that whenever the next major upheavals come, the firms with the most flexibility will be among the most successful.
If we can help you with your network, please speak with our experts today.
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The company was founded in 2004 and serves the world’s largest financial institutions. BSO is a global pioneering infrastructure and connectivity provider, helping over 600 data-intensive businesses across diverse markets, including financial services, technology, energy, e-commerce, media and others. BSO owns and provides mission-critical infrastructure, including network connectivity, cloud solutions, managed services and hosting, that are specific and dedicated to each customer served.
The company’s network comprises 240+ PoPs across 33 markets, 40+ cloud on-ramps, is integrated with all major public cloud providers and connects to 75+ on-net internet exchanges and 30+ stock exchanges. The team of experts works closely with customers in order to create solutions that meet the detailed and specific needs of their business, providing the latency, resilience and security they need regardless of location.
BSO is headquartered in Ireland, and has 11 offices across the globe, including London, New York, Paris, Dubai, Hong Kong and Singapore. Access our website and find out more information: www.bso.co
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