SIFMA 2008 - Where we will be hosting events and talking with partners, clients and press all week!

Welcome back to Intelligence in Finance – our regular newsletter on technology related activities we see in global financial services. Launched in early 2007, we are revisiting the inaugural area of focus – trading.

An interesting year - let’s pick out some highlights.

Nigel Woodward Global Director, Financial Services Intel

Back in Q1 2007 we announced the opening of the Intel fasterLAB in London and the visibility of how the technology infrastructure could contribute to speed, performance and scale in the trade life cycle. Early tests showed in excess of 20 percent throughput improvement from FIX engines through the use of in-silicon features – and the low latency arms race was on. Early innovative focus on proximity hosting and networks soon became a norm, and the market looked at the technology layers which provided the best ROI if given the engineering treatment.

We seemed to be in a perfect storm. Market regulation (Reg NMS, MiFID) on both sides of the Atlantic was creating a backdrop for new market practices which were playing out in multiple new venues, the threat and opportunity of even more, disintermediation plays, market data volumes going through the roof with no end in sight and demands on information and historic reporting (best execution) putting new strains on data management.

In such situations technology demand and supply moves up a gear – and the choice of routes to new competitive solutions becomes daunting. Out of this the Intel fasterLAB became established as a facility for Intel’s many partners to trial software on the new processor platforms as they revved through dual- to quad- and multi-core, with 45nm processors entering the race in Q4. For clients, the same lab provides the ability to demonstrate and test the effects of individual layers in the solution stack by changing one layer and holding the others constant to see where incremental gain can most effectively be achieved.

As technology choices advanced and selection became an issue, STAC came to market with highly effective performance testing services for new technologies. Comprehensive reporting on market data and trading technologies under the “ever lower latency” banner became the norm – with the opening of the current chapter in September 2007 to standardise tests through the auspices of the STAC Benchmark Council. Collaboratively defined standard tests for market data feeds, distribution and analytics are in beta test and now mark a next phase in the assessment of trading technologies.

So where is Intel in trading technology and financial services? I believe strongly that the last 12 months has seen Intel become established and recognised as a facilitator of innovation in technology design and deployments. Our labs have proved that IA (Intel Architecture) tuning brings performance improvement – improvement that translates directly to extra trades, more market data, improved processing efficiency and reduced heat output from a data centre with the throttle on the floor boards.

The 2006 arrival of Core 2 microarchitecture has seen Intel lead the performance-watt race, 45nm introduced in 2007 delivered staggering improvements and in 2008 Nehalem microarchitecture will come to market and bring with it another quantum leap in innovation.

We hope you find Intelligence in Finance - where we try to give commentary on some of the highlights in the market – a helpful guide to our work with the financial services industry. This newsletter combines with our fasterFS events around the world and the www. intelfasterfs.com website to continue the Intel FSI community journey. Leave us comments, and we look forward to being with you again in September, before SIBOS with more topical commentary.

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Filed under: Issue 5 - Summer 08, Trading