Deutsche Bank, BT Radianz Offer Low-Latency Data and Execution Access Jun 16, 2006 URL: http://www.advancedtrading.com/showArticle.jhtml?articleID=189401876
Deutsche Bank has teamed with BT Radianz, a provider of connectivity and hosting services, to offer a hosting solution that provides low-latency access to market data and trade execution globally. The investment bank will offer the service, called Radianz Proximity Solution, to its hedge fund clients based in Europe. BT Radianz also recently announced that its Proximity Solution now is available in Asia.
The new hosting solution is based on BT Radianz's existing financial markets extranet, which has an infrastructure that features more than 200 service providers, a client community of some 10,000 financial institutions and nearly 500 financial applications across the straight-through processing (STP) chain. "With Radianz Proximity Solution, we solve the most critical problem in the financial industry today - low-latency access to markets for algorithmic trading," according to Mark Akass, chief technology officer, BT Radianz.
"The benefit of Radianz Proximity Solution is that it places clients' trading engines, their algorithmic servers, into our network premise, effectively moving them much closer to the trade venue source and the trade data," Akass explains. As a result, firms that currently are making trades from 30 milliseconds away can bring that distance down to 1 to 3 milliseconds, he contends. "It's a significant reduction in latency and means that customers can trade in whatever market they need to be in and still have proximity to that market equivalent to firms that are [physically] located much closer."
Deutsche Bank saw the Radianz Proximity Solution as a way to better serve its hedge fund clients, whose main concerns are anonymity, speed and stability of the platform, according to Kevin Nealis, head of European direct market access for equities at the investment bank. "By going this route with BT Radianz, our clients can place their hardware at the Radianz location, and by us being there with Radianz, there is a larger bandwidth available to the customer to get the exchange data and market data they need," he explains.
Further, by minimizing its intervention, Deutsche Bank's clients can experience faster order transition. "We have to have the checks on our side to meet regulatory and exchange oversight and supervisory requirements, but it's a matter of minimizing that to the most possible extent," Nealis explains. By putting its clients' hardware closest to the source and increasing the bandwidth, the proper checks can be put in place while still reducing latency, he asserts.
Deutsche Bank is the first investment bank in Europe to provide its hedge fund clients with the ability to host their hardware in BT Radianz data centers. In today's market, the decision-making process has become faster, so the time to execute the decision needs to be minimized, Nealis notes, adding that technology is being used more and more in this space to give firms the information they need. "More and more clients and firms are executing their trades electronically, so this is just a progression of that trend," he says.
"It's just the nature of the industry," Nealis continues. "It's getting faster, and we have to be there to be a provider."