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Ultra low latency: Staying connected as China fast tracks a return to economic normalcy

Article by David Brown, President and Chief Commercial Officer, IPC Systems

China’s reopening serves as a critical turning point for the global economy with significant implications for Asia-Pacific trading communities. As the world’s second-largest economy hastens its return to normalcy, growth projections have surfaced, reflecting a mix of optimism and caution regarding China’s economic future. Notably, China has set a modest economic growth target of around 5% for the year, with the nation’s top leaders avoiding any large stimulus to spur a consumer-driven recovery already underway. This suggests that the growth boost to the ailing world economy may be less than anticipated.

To effectively navigate the challenges and opportunities stemming from China’s accelerated return to economic normalcy, capital markets have placed increased importance on technology. Low latency and ultra-low latency global connectivity solutions, hybrid and multi-cloud platforms are essential components of any organization’s technology infrastructure, particularly as they navigate these changes.

Securing high-speed trading with ultra-low latency connectivity, hybrid and multi-cloud platform ecosystems

With markets moving at lightning speed, financial market participants need to make real-time decisions and execute trades quickly. Even milliseconds of latency can mean the difference between profit and loss. The importance of reducing latency cannot be overstated, particularly considering the rise of stat arb desks and algorithmic traders, for whom ultra-low latency connectivity is one of the most critical weapons in their arsenal to maintain a competitive edge.

The need for ultra-low latency connectivity is further amplified in the context of China’s reopening, as financial market participants seek to make the most of the opportunities arising from the country’s economic recovery.

David Brown, President and Chief Commercial Officer, IPC Systems

As capital markets adjust and react to China’s reopening, ultra-low latency global connectivity will be crucial to navigating this change. Financial market participants will need to utilize hybrid and multi-cloud platform ecosystems to trade faster and become more agile to enhance competitive advantages. IPC Systems have long-supported financial market participants as markets transform and evolve. Having access to a secure and resilient network that meets every compliance requirement is vital during changing market conditions.

Hybrid and multi-cloud platform ecosystems enable financial market participants to leverage the benefits of both private and public cloud solutions. By doing so, they can ensure that their trading applications and data are hosted in the most appropriate environment. For example, sensitive data can be kept on-premise, while other applications can be hosted on a public cloud infrastructure.

With a large-scale multi-cloud platform system that interconnects diverse capital market participants globally, firms can also capitalize on the best routes to market with increased scalability and reliability. Applications and infrastructure can be scaled more easily and efficiently with built-in redundancy that improves reliability and reduces the risk of downtime.

The importance of secure and resilient networks in today’s interconnected financial landscape

China’s role in the global economy is expanding, and its financial markets are becoming increasingly integrated with those of other countries; having secure networks between China and other capital markets is essential for facilitating cross-border trade and investment, and promoting economic growth.

As the financial landscape continues to evolve, the ability to trade anytime, anywhere, from any device – in a secure and compliant manner – is an enormous competitive benefit in an uncertain environment, where regulations are ever-shifting, and cyber threats see increasing sophistication. Failure to maintain the necessary security protocols can result in devastating consequences, including data breaches, regulatory fines, and reputational damage. Financial market participants require a comprehensive communications infrastructure that is not only able to withstand changing market conditions but also offers resilience and security.

The challenges faced by financial market participants in maintaining network security and regulatory compliance are numerous. The ability to withstand cyberattacks, implement complex regulatory requirements and manage risk across multiple jurisdictions and platforms is crucial to maintaining stability in the financial system. As a result, financial market participants require a solution that can future proof their trading technologies and enable them to adapt and maintain their competitive edge in the event of market fluctuations. They expect a higher standard from their infrastructure provider, with innovation and technology that is constantly evolving to respond to these increased demands.

China’s reopening presents new opportunities and financial market participants must be agile in seizing them. Collaboration has therefore become imperative, where shared market insights, knowledge, and resources are leveraged to achieve success.

A comprehensive communication infrastructure not only has to fulfill the requirements for compliance, resilience, and security, but it must also facilitate effective information exchange, enabling financial market participants to work together seamlessly and share critical market insights in real time.

Preparing for the future

Ultra-low latency connectivity is critical to the operational success of global financial markets, where every trading firm is a participant in an interdependent network. The complexity of global networks requires communications resilience and redundancy.

In the era of China’s reopening economy and beyond, staying connected is paramount. The global financial marketplace is an interdependent network in which every member plays a unique and vital role. The right type of network and connectivity platform enables market participants to differentiate themselves from competitors, capture alpha, and gain a strategic advantage in the marketplace under a range of market conditions. Consequently, connectivity and communication are essential components of an efficient trading ecosystem, with the new normal highlighting the need to seamlessly integrate multiple communication channels.

To fully capitalize on the opportunities presented by China’s reopening, businesses must employ low and ultra-low latency global connectivity solutions, hybrid and multi-cloud platforms. These solutions provide the necessary flexibility and agility to effectively navigate the complex and rapidly evolving global landscape while also fostering strong connections with customers and partners in China.

The views in this article are of the author and may not reflect the views of Tech Wire Asia.