Brexit as a driver for trading floor transformation

At the time of writing this, the parameters and timeframes surround when, how, and even if Brexit will take place, continue to shift. But amidst the ambiguity of the outcome and arrangement that the UK will ultimately come to with the European Union, there is certainty within the financial services sector that some degree of change and disruption is inevitable.

The full extent of the acceleration of these changes in 2019 will depend upon the nature of any agreement on regulatory equivalence and market access rights (EU Passporting), but action is already being taken by many in the industry to ensure that the future of the UK’s relationship with the EU is not a cliff edge situation for them.

Numerous financial institutions have already announced plans to open offices or expand operations in other European capitals. A prime example is Bank of America, who revealed plans for a new Paris Trading Floor this summer to accommodate up to 1,000 staff. According to the Financial Times, the French capital is an increasingly popular location for new subsidiary registrations, competing strongly with the likes of Frankfurt and Dublin in allowing continued passporting with the remaining EU27 from an alternative legal entity to London.

Whatever the outcome (or next milestone) of the Brexit process, financial services organisations need their operational solution to the regulatory changes to be technologically and economically practical. If establishing a presence in new regions is likely to occur - and at short notice - then agility and flexibility going forward are going to be key, especially for trading positions. From an IT perspective however, relocating a trading floor presents a number of complex challenges.

Firstly, each typical trader workstation features a high-end desktop server class machine with multiple high definition screens running an increasing variety of trading software platforms, live video and other highly graphical real-time feeds. It is also commonplace for trading models to be run locally, adding to the significant processing power required to operate the desktop at the speed and reliability required by traders.

Secondly the density of these high-end machines on a trading floor often necessitates special cooling and power arrangements above and beyond that of a typical open plan office space. Lastly the high rate of desk moves on a trading floor also incurs high operating costs. Downtime during trading hours in unacceptable, therefore any changes must be performed out of hours, again carrying significant cost.

Combined, these factors have historically bred an IT environment saddled with a high TCO that lacks flexibility, inhibits personnel movement and collaboration, and is difficult to replicate and maintain in a disaster recovery (DR) scenario.

To survive and thrive in the face of the uncertainty thrown up by the variety of possible outcomes to the UK’s withdrawal from the EU, financial services organisations need a trading floor that offers the IT power of the traditional static environment, but with the added benefit of today’s leading cloud capabilities.

CenturyLink has partnered with HPE to help solve this challenge and provide an agile Trader Desktop as a Service offering which enables a flexible VDI based solution without compromising the trader's desktop performance and graphical experience. The solution utilizes HPE Moonshot server technology, combined with CenturyLink's high capacity network and data centre infrastructure running Citrix Xen desktop via a thin client.

Virtual desktop deployments have been extensively used in non-trading environments to deliver lower TCO, greater flexibility and improved DR benefits, but until now have typically fallen short of delivering the end user performance required by trading floors.

 

The key difference with the CenturyLink / HPE service offering is:

  1. HPE Moonshot technology and the ability to dedicate a small form factor high performance compute bare metal instance per trader in a cost-effective manner
  2. CenturyLink’s adaptive network and access to in-region DCs deliver the solution directly into the trading floor with flexible high capacity and low latency ensuring performance isn’t compromised.

 

When it comes to disaster recovery, the nature of a VDI solution continues to bring inherent benefit. In this instance, relocation to a DR workspace isn't reliant upon mirroring a complex and rapidly changing environment in case of failure. All that's required for recovery is a set of VDI thin clients and network connectivity to the data centre. With DR an increasing focus for financial regulators across Europe, the ability to prove capability in this area is of increasing importance for today's financial institutions.

While we may be looking at Trader Desktop as a Service through the lens of how to manage the uncertainty of Brexit, the applicable benefits of the combined CenturyLink and HPE approach to the trading floor are significant in their own right. Ignoring the impetus of impending regulatory change, the freedom to quickly build out new trading floors without the need for special cooling and power arrangements - and at relatively short notice - is an enviable model for all.

The flexibility to relocate traders to any trading desk with access to the centrally hosted Moonshot servers is a huge advantage to financial institutions, giving them the agility to react to any perceivable change in circumstances, and not just the current challenges facing the industry.

Often in life a catalyst is needed to bring about significant change for the better. And whilst most of the media coverage of Brexit paints a picture of fragility and negativity, perhaps trader desktop IT is one area where this change may unlock a more agile and flexible future for a transformed trading floor.

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