Scalable infrastructure solutions may become even more crucial as trading markets evolve. Firms are facing mounting challenges related to infrastructure costs, regulatory compliance, and the need for low-latency trading. Financial markets traders must have reliable connectivity and robust market data feeds to drive their trading.
The underlying infrastructure required to achieve this is extremely expensive and requires significant technical expertise and on-going investment. Also, as trading portfolios grow more diverse and complex, the demand for scalable infrastructure solutions has risen sharply.
Trading Infrastructure Trends
The past few years have seen leaps in demand for infrastructure bandwidth, in part driven by increasing global demand to access the US Equity Options markets. This, together with the rise of retail traders entering the markets and new trading products such as zero-day options, has significantly increased the volume of traffic over infrastructure networks. Two years after OPRA pushed bandwidth requirements beyond the 40GB mark, infrastructure demands have continued to escalate driving networks to offer 100GB capacity, to keep pace with the ever-increasing volume of data flowing through global trading systems. Indeed, accessing vast amounts of data to drive decision making was highlighted in a recent JP Morgan survey. When electronic traders were asked to cite their top three market structure concerns for 2025, market data access and costs were ranked alongside access to liquidity and regulatory change.
Why Engage a Trading Specialist?
As a result of these increasing data requirements, regulation and spiralling infrastructure costs, many trading firms looking for scalable infrastructure solutions are turning to Managed Service Providers (MSPs) offering competitive, reliable and fast trading infrastructure, connectivity, and market data services. When delivered as a fully managed Infrastructure-as-a-Service (IaaS), this can significantly reduce the burden, complexity and cost attributed to firms ‘going it alone’. Trading firms should look for a provider that truly understands the trust implications and operational responsibility of ensuring trading systems are always available.
Additionally, firms should consider identifying a provider that combines a vendor-neutral approach to market data application management, alongside end-to-end hosting, market data and consulting services specifically for the financial markets industry. This will help ensure that offerings are designed and built with financial trading community requirements front of mind. By using shared infrastructure services, traders can get the benefits of expertise and technology, at a fraction of the cost of doing it for themselves.
Achieving trading success requires access to extremely powerful servers, with the best data lines and connections close to exchange matching engines where the trade is physically taking place. Processing close to the source of the input data provides the lowest possible latency between input and response – and speed matters. Milliseconds can mean the difference between losing or gaining millions. MSPs offer prime positions within data centers, along with flexible leasing options for fully serviced equipment and on-site, expert support.
What About the Cloud?
The public cloud initially promised compelling benefits, including cost-savings and impressive scalability. While it remains well-suited for some applications, such as back-office systems and large data processing, many firms have come to realize over the past year that it’s not an optimal fit for the entire trading infrastructure stack. For example, the cloud struggles with handling multicast data and lacks the deterministic latency and precise routing required for market data networks. Also, in some cases, it can be more expensive than a private network. TNS enables customers to integrate cloud access seamlessly, offering high-speed links to all major providers. Many firms now seek a hybrid approach, combining cloud resources with bare metal servers and low-cost data centers, in a single flexible package.
Client demand is rising for dedicated servers, designed specifically for high-performance trading. By utilizing state-of-the-art bare metal servers, as well as ultra-low latency trading connectivity, capital markets participants can optimize performance while reducing capital costs. Leasing models for hardware upgrades and infrastructure refreshes further alleviates the burden of maintenance, ensuring firms can scale efficiently as their business evolves.
Additionally, increasing compliance requirements, such as the Digital Operational Resilience Act (DORA), which became applicable in January 2025, have placed additional controls and reporting requirements on financial institutions and their critical suppliers.
Scalable Infrastructure Solutions Lead to Sustained Success
Financial Services is a dynamic industry with many new entrants year on year, including firms looking to leverage AI. In today’s fast-paced trading landscape, firms face unprecedented challenges balancing performance, cost-efficiency, and regulatory demands. By leveraging industry best practices, carefully selecting infrastructure partners, and embracing scalable infrastructure solutions, firms can position themselves for sustained success in the financial markets.
Jeff Mezger is Vice President of Product Management at TNS with responsibility for its managed services for the financial industry.