How Colocation, Connectivity and Content Boost Financial Firms

How Colocation, Connectivity and Content Boost Financial Firms

April 30th, 2019 - Financial, Global Connectivity

By Stefano Durdic, Managing Director of Transaction Network Services’Financial Services business

 The “3Cs” – colocation, connectivity and content – are familiar to any successful financial services firm.

  • Colocation in the right facilities gives trading firms the highly valued resource of low latency access so that they can receive price updates and route orders faster than other investors. In these environments, microseconds make all the difference.
  • Connectivity gives traders fast access to their counterparts, trading hubs, market venues and more, all over the world.
  • Content is key, as traders rely on real-time market data around the globe from exchanges, electronic communications networks and alternative trading systems.

But how do firms manage these crucial elements of their operations most efficiently? All too often, they use a different vendor for each “C,” rather than a single service offering all three. In that scenario, if a problem arises, they have to juggle communications with each of those vendors to find out which C is causing the issue, and then begin troubleshooting.   

However, when a firm engages a single vendor that focuses equally on colocation, connectivity and content; assessing and quickly solving any downtime occurs much faster. The cost to troubleshoot any problems also drops dramatically by engaging a single vendor with expertise in all 3Cs – because all the pieces are right in one place.

Let’s look a bit closer at how the 3Cs might fit together within a single infrastructure provider:

When it comes to colocation, trading firms have to know they have infrastructure in the right spot, right now, as well as in the future. They need a vendor with that knowledge, and boots on the ground in every key global market, to constantly assess circumstances and provide up-to-the-minute intel on the best locations to establish low latency connections.

Financial service organizations cannot spare expenses for connectivity. They need expert engineers who maintain the network as well as airtight security. In high-frequency trading, nothing is more crucial than low latency, and any network worth its salt will have forward-looking intelligence on which routes are fastest.

The most useful and valuable content also requires a provider with the expertise and tools to monitor traffic needs. This empowers firms to monitor the amount of traffic required to transport market data, while also projecting future capacity needs. If a network provider doesn’t have this information, then they will not be able to use it to provide the best connectivity.

Each element of the 3Cs ties together to enable traders to be successful. The best infrastructure partner will offer all three globally, supported by staff in each major financial center who can provide counsel for the fastest and most successful trading, and have the relationships and expertise coupled with a drive to empower their clients to win every trade.

Find details for your appropriate TNS representative on our contact page