No longer are the world’s financial markets confined to a handful of cities. Information technology and the distribution of wealth have created new markets across the globe, each providing fresh opportunities to make a fortune.
In some ways, however, the infrastructure over which traders exchange information still resembles the old world.
Financial information provider Thomson Reuters’ network, for example, has to date formed a hub-and-spoke pattern. Trading data, for example, is transmitted from the point of origin to one of just a few collection points, one in each continent. The data is converted into a standardised format at one of these hubs before being transmitted to whoever might need it.
In the financial trading sector, of course, a high premium is place on the speed of information transfer, and this hub and spoke model introduces unnecessary distance between points on the network.
This, according to Thomson Reuters’ head of information management systems Terry Roche, is part of the rationale behind the company’s forthcoming Elektron network platform.
“What’s fundamentally different about the Elektron network is that as opposed to having a central aggregation point, there are a number on-ramps and off-ramps where the information will be able to enter or leave the network,” he explains. “The closer you are to that information the shorter your journey and the faster you are able to consumer your data.”
Elektron itself is a fibre-optic network, but the “on-ramps” and “off-ramps” to which Roche refers are supported by a global network of recent and new data centres, managed by Thomson Reuters in partnership with data centre hosting provider Savvis. So far these have been deployed in Tokyo, Singapore, Frankfurt, London, New York and Chicago and further locations in Hong Kong, India and Brazil are in development.
Helping to boost the performance of the Elektron platform is the fact that Thomson Reuters has rewritten its information distribution application to make use of multicore microprocessors by allowing multiple processing tasks, or threads, to run in parallel.
“In the past we were able to create one just thread of data through our infrastructure,” says Roche. “Now we’re running nine threads through the same footprint.”
The performance improvement that Roche claims has resulted from this re-engineering is impressive. “Two years ago, our infrastructure was able to distribute approximately 1.5 million updates per second. Now on the latest chip sets, in the same footprint, we’re able to distribute 34.2 million updates per second.”
This performance boost will help Thomson Reuters meet the ever growing demand among trading organisations for more and faster data, says Roche, and it has allowed the company to build out its distribution systems across the Elektron platform at a viable cost.
But Roche argues that the benefits of Elektron stretch beyond speed. “We’re going to enable customers to create and publish information and message each other on a peer-to-peer basis,” explains Roche. “Participants in the Elektron network can share ideas and information back and forth so they can execute on those ideas, which we feel is revolutionary in an open platform.”
Roche envisages a new era in financial trading, where collaboration and information sharing – as mediated by Thomson Reuters’ networking platform, of course – help to “unleash the genius of the industry”.
This claim resonates with the zeitgeist; a lack of transparency and limited information sharing between financial institutions is one of many factors to have been blamed for the credit crunch.
Whether trading organisations take the bait is for them to decide, but the proposition that distributed and decentralised systems lead to greater information sharing is not without precedent.