29 November 2014

Paul Gow

Paul Gow - CJC IT Ltd

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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Back to the future

28 September 2012  |  2642 views  |  0

It occurred to me the other day that in a world where everything seems to come in cycles, market data appears to be no different.  If you go back as far as I do in this business and I’m guessing that you do because everyone in this industry seems to have been in it forever (…but that’s for another blog) then you will remember the early years.  Back then “market data” was Reuters page FXFX and Telerate page 500 and “low latency” sounded like a medical condition.  When I was young and all the screens were green!

Back then, computers were massive and expensive; I remember the room sized mainframes that occupied entire data centres and had less processing power than my current smart phone does!  These were the days of centralised technology, where organisations didn’t have the skills, the space and least of all the desire to house and manage their own computer systems. 

Things changed and as technology improved and more importantly, the more attitudes towards it shifted, the opportunities that it presented were embraced.  This was when the role of technology in the financial services industry changed forever.  In line with “Moore’s Law”, computers quickly became more powerful but crucially they got smaller and cheaper as well.  It was becoming possible for organisations to harness these new tools and turn them to the job of making money.  This was less technology “in sourcing” and more technology “genesis” with organisations building their first networks and infrastructures.  There was suddenly an ability for a pit trader in CBOT’s price to be on screens in London and Tokyo in the time it takes to get served a drink in All Bar One, come to think of it, the price’s got there faster than the Peroni’s do! 

Market data grew and evolved and soon everyone had their own real time infrastructures, every trader, dealer and broker had a desktop from which they viewed the financial world, and on it went. 

As the technology continued to improve, organisations became wise to the possibilities it presented and the tables were turned.  Suddenly technology wasn’t driving the businesses anymore, the businesses was driving the technology.  In-house developers and clever start-ups were writing algorithmic trading and analytical applications that were demanding vast amounts of faster, more powerful hardware.  Comms rooms grew to bursting point and then the really big players started building data centres!

Now with costs spiralling and the recession biting, these same organisations are asking themselves “why is so much of my budget being chewed up by IT?”. 

In my opinion hosting could very well be the answer, leveraging shared infrastructures co-located with exchanges can give the required performance and greatly reduce costs.  Leaving the job of running data centres, monitoring and management of service to experts is allowing financial organisations to concentrate on what they do best.

So here we are today and the best, most cost effective computing power available is massive and takes up a lot of space…. We’ve been here before haven’t we? 

Has anyone seen my Delorian? 

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name

Paul Gow

job title

CEO

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CJC IT Ltd

member since

2010

location

London

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Co-founder and CEO of CJC - the independent market data consultancy. www.cjcit.com

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