Middle and back office executives could make good use of market data delivered through the cloud, according to a group of panelists at the Securities Industry and Financial Markets Association 2010 Financial Services Technology Expo in New York on Wednesday morning.
“Valuations and risk management experts would be the most likely candidates to use the market data on a demand basis,” said Peter Hald, market director for BG Cantor Market Data, a subsidiary of global interdealer broker BGC Partners, in response to a question posed by Securities Industry News. “Valuation specialists are requesting end of day data while risk management experts need readily accessible data on which to make their calculations.”
Despite the hesitancy of middle and back-office executives to embrace the cloud, Hald insisted that the benefits were compelling. “The risk is in not looking at different ways of accessing data,” he said.
In February, BG Cantor announced that it inked a deal with the San Mateo, Calif-based web services on demand provider Xignite, to offer BG Cantor On-Demand, a pay-as-you go service for fixed-income and derivatives data including benchmark treasury, fixed-income, foreign exchange, emissions, futures and credit derivatives data.
At that time, BG Cantor also said that it would market BGCantor On-Demand, to middle office executives and portfolio managers who required timely market data but not necessarily a full data feed.
Other customers of Xignite include the Chicago Mercantile Exchange and Nasdaq OMX, which announced its deal with Xignite on Monday.
Among the other uses of cloud computing for market data cited by panelists: the broad canvas of real–time trading and non-low latency applications such as pre-trade analytics and back-testing, position and profit and loss reporting.
Cloud computing involves processing, storage networking and applications accessed over the public network such as the Internet or a private Intranet. The so-called market data cloud relies on cloud technologies and concepts such as intrastructure-as-a-service; platform as a service and software as a service models. Infrastructure as a service refers to the use of hardware, operating systems, databases and middleware on a scale-up or scale down basis while platform as a service refers to the quick development of applications.
Software as a service is the delivery of applications without the need to invest heavily in IT costs and on a pay-for-use basis. Such a scenario avoids high up-front costs.
“[The market data cloud] has the potential to cut costs, complexity and the headaches of maintaining large data management infrastructures,” said Stephane Dubois, chief executive of Xignite, who also spoke at the of data via Web services standards. That value proposition is ideal at a time when firms must overcome budgetary restrictions and shortage of staff.
Attendees at the SIFMA tech show appeared to agree with the panelists’ assessment of the uses and merits of the so-called market data cloud: “When you need to analyze historical tick data or get real time ad-hoc time quotes there can be loads of programming involved to access data feeds and store the data,” said one market data management executive from a New York-brokerage firm. “It’s far easier to get make requests for the data through the cloud.”
Yet another attendee,a data management executive at a New York brokerage firm, suggested that financial firms also might want to use the cloud for reference data.
This article can also be found at SecuritiesIndustry.com.
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