The global financial markets are on the cusp of a new age of interconnectedness, an era when delivery of the right data to the right people at the right performance level and in the right format is more easily achieved, what Tabb Group in a new research report calls “global markets on demand.”
Central to its widespread adoption and subsequent implementation, says Paul Rowady, senior analyst and author of the report, “Global Markets on Demand: Unified Infrastructure Required,” is data fabric, a combined hardware-software approach, an intelligent overlay on traditional data storage infrastructure and network connectivity, the “next breakthrough in financial technology with the flexibility to trade any financial instruments at any performance level with relative ease.”
The new report explores the roadmap to achieving greater ease of trading in all global markets by adopting new infrastructure architecture for trading firms and discusses how the wide variance in communications performance characteristics required in trading has spawned multiple implementations of trading infrastructures carrying massive complexity and costs, rendering legacy hub-and-spoke data storage architecture unsustainable.
The report also outlines the key functionality of data fabric and how these features offer for the first time the possibility of unified trading infrastructure and the potential to usher in an Age of Interconnectedness with unprecedented benefits.
As Rowady explains, data fabric unifies performance requirements through temporary, in-memory storage and virtualisation of critical trading datasets and provides peer-to-peer publishing functionality by transforming end-users into computational nodes on the network, just like matching engines and other trading systems.
“This new information architecture allows firms to harvest greater value from their data spend, eliminating the piecemeal approach to connectivity that overburdens trading firms. By providing a unified infrastructure, the data fabric solution connects venues, data sources, applications and market stakeholders,” he says.
Despite the momentum towards “trading the globe,” where direct, intelligent and on-demand access to all listed markets coupled with increasing automation of over-the-counter markets is inevitable, four impediments to interconnectedness exist, dealing with physical (hardware and storage), logical (software that routes and provisions data), visual (user interface design and data visualisation) and organisational (reorientation of business silos and development of an enterprise mindset, or data culture) issues.
“From all corners of the financial markets, there have been cries for more cross-border, cross-asset, multi-strategy functionality. Now we can begin to answer those calls with data fabric,” says Rowady. “It is the central nervous system for global markets to bind critical components in a unified manner. Without this unified, enterprise-level trading infrastructure, overcoming the impediments to trading the entire globe on an on-demand basis will continue to elude the industry at large.”
