Safeguarding FX Operations

By Tim Carmody, Chief Technology Officer, IPC

In every industry, there are movements and shifts to public cloud. Amazon, Google and Microsoft are taking the lead, moving significant amounts of computing requirements  to cloud services, and a significant portion of the marketplace is adopting noticing and following suit. In this article, I will discuss the role of public and private cloud in the FX trading environment, and how firms can ensure they are adequately protected.

There are a lot of advantages to using the public cloud, namely increased flexibility and simplicity. However, it also generates a number of inherent risks for FX traders. Indeed, what happens if there is a public cloud outage? In July 2018, Google experienced an outage to its public internet Global Load Balancers that impacted Spotify, Snapchat and other popular services, whilst the AWS S3 storage system suffered an outage in February 2017 leading to hundreds of websites, including Slack, Docker and Soundcloud, being affected. The reputational and, most importantly, financial impact of these outages was viewed as significant. According to a Lloyds of London report last year, the impact of a cloud outage at one of the major cloud providers could result in a loss of up to $19bn – an amount that could potentially cripple a huge number of businesses.

Utilising private connectivity

Unsurprisingly, outages are a legitimate concern for anyone putting business critical applications and data onto public cloud servers. The public cloud may be convenient, but in many cases it doesn’t meet privacy or performance requirements desired by most trading companies. Enterprises need to have faith that trades can be made and deals closed securely wherever or whenever they are trading.

In addition, firms often need computing resources co-located at major FX venues and command-and-control capabilities for management. Coupled with sensitive data and intellectual property of algorithms, this drives a use for hybrid clouds which leverage public cloud and private computing.

To remain competitive, FX traders need to be able to collaborate, share corporate resources and applications, and connect multiple business locations around the globe. Indeed, with trading books spanning multiple time zones over the course of a day, FX firms need performance guarantees that applications and services can be accessed and relied on as markets open and close around the world.

Firms are subsequently choosing to use private network connections as Cloud Connect and co-located algos to provide a holistic model with reliable, seamless access to business-critical services, mixed with applications housed in the cloud. Private clouds and connections not only safeguard corporate data, helping traders protect confidential information and meet stringent regulatory requirements, but they also optimise infrastructure Return on Investment (ROI), making it much more efficient and cost-effective. By lowering operational costs, FX traders are able to focus on their key business.

Furthermore, by locating resources at FX venues and using private connectivity, organisations are able to scale easily by adjusting bandwidth and modifying capacity on demand. Indeed, traffic is always inconsistent, with market trends and rapid volume swings.  Having the ability to manage burst traffic is therefore incredibly important for FX traders who require a reliable connection at all times.

Reliable, secure access and eco-system

IPC’s Connexus ecosystem is uniquely positioned to deliver access to the public cloud via its private cloud. For instance, firms can get to over 550 Cloud Service Providers (CSPs) and public clouds by using one secure connection to IPC. Connexus Hub provides a flexible model for co-locating resources at premier FX locations with global access for synchronisation and command-and-control.

The Connexus suite is a fully managed Network as a Service (NaaS) with Points of Presence in over 130 locations globally. Using its MPLS backbone, IPC can establish private network capabilities at any location around the world, and use those connections to provide access to public cloud providers, including AWS, Google Cloud and Microsoft Azure. Connexus Extranet, IPC’s Layer 3 extranet solution, has been built to the specifications of capital markets participants, as have all of IPC’s industry-leading solutions.

According to Gartner, about five percent of enterprise public cloud connections avoid using the public cloud in favour of private connectivity, and this number is expected to rise over the next decade. As businesses increasingly move their mission-critical applications to the cloud, network security and performance are becoming increasingly crucial. For FX traders, taking advantage of direct WAN cloud connectivity is the natural progression in ensuring their trades, communications and resources are sufficiently protected, whilst also delivering a high quality, seamless service.

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