Survey Finds Banks to Invest in Reducing Latency

A poll of investment banks by COLT Telecom has revealed that, although the credit crunch is likely to impact front office spending this year, the majority of firms still expect to invest in reducing the latency of their trading systems. All of the finance IT professionals who took part in the survey, conducted at a recent customer event in London, rated latency as either ‘critical’ or ‘very important’ to successful electronic trading of securities. Ninety per cent said they expect to invest in reducing it in 2008. Electronic trading depends heavily on speed of execution and availability of market data for success and even a millisecond’s delay can potentially impact margins and profitability. All respondents who took part in the poll said the physical proximity of their trading systems to the stock exchange’s systems was either ‘critical’ or ‘important’ in lowering latency. More than half of the survey respondents said that the credit crisis is likely to have an impact on front office spend in 2008 within their organisation.

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