PrimeXM has been at the forefront of the connectivity solutions market as the firm committed to a big expansion in 2017. The company managed to increase its client numbers after shifting gears in its marketing approach and opening new offices globally.
The firm’s CEO Cristian Vlasceanu has shared some insights that might be useful to brokers when selecting a connectivity provider.
What is the most challenging aspect of ensuring uninterrupted service for a brokerage?
The most difficult aspect of ensuring uninterrupted service for a brokerage has to do with the system’s ability to deal with the high demands of the trading environment. It is crucial for your system to be able to deal with micro-bursts, buffer overflow or volatile market events when everything needs to perform as expected.
Redundancy can also play a critical role. Full geographic and on-premise redundancy with automatic failover in case of hardware failure can be crucial. All equipment must run in paired mode, and it is also vital to make high-level network configurations for automatic backup routes.
DDoS attacks can be a real issue as well, as they can bring down the service and adversely affect the reputation of a financial institution. Having a powerful DDoS mitigation mechanism is absolutely necessary to ensure continued service even when the system is under attack.
What are the main criteria brokers should look at when choosing a connectivity provider?
Choosing a cutting-edge connectivity provider will allow you to meet the high demands of the industry and help you get ahead of the curve. This means that to choose a connectivity provider you should firstly scrutinize over every aspect of their offering.
One of the most important elements to consider is their infrastructure as it is a vital aspect of building a reliable and consistent trading environment. Access to the industry’s premium data centers should be considered absolutely necessary as it facilitates low latency and puts your business in the heart of things, ensuring instant price updates and timely order processing.
Apart from physical location, it is also important to ensure that your connectivity provider offers state of the art hardware at each level: application servers, storage solutions, network devices, dedicated fiber connections, secure environment and redundant ISP, as well as powerful DDoS mitigation mechanisms.
Another vital aspect that brokers need to take into consideration is their connectivity provider’s scalability capabilities. Choosing a connectivity provider that caters to your current needs is important, but it is also crucial to make sure that your future requirements will also be met. For efficient growth, your system needs to be flexible and adaptable, otherwise, you risk finding yourself at a disadvantage and with a system that slows down growth; as such, provisioning for future needs should also be a critical factor in choosing a connectivity provider.
Partnering up with a connectivity provider offers many advantages to an in-house team as it not only cuts costs, but it also makes infrastructure management less complex, while it also allows brokers to leverage their provider’s experience and make further improvements to their setup.
It may also be to the advantage of the broker to source technology and hosting from the same provider as it is easier to manage these relationships more efficiently, while it also makes dealing with potential problems and issues a more straightforward process.
Competition in the marketplace is intense, what are the key differentiators between connectivity providers?
What can really set apart your trading environment is your connectivity provider’s infrastructure. As such, it is crucial to look into your connectivity provider’s infrastructure and ensure that it is both reliable and cutting-edge.
Apart from reliability, there’s also scalability to consider. It is important for your system to be able to grow as your business grows and while many connectivity providers can support either small startups or bigger financial institutions, few can scale their offering to meet the growing needs of a brokerage.
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Support is also a key differentiator as it is important to be able to rely on your connectivity provider to resolve issues quickly and efficiently. Expertise and technical know-how are critical as they can help provide meaningful guidance and pro-active support.
Another factor that needs to be taken into consideration is the access level granted for your setup. You should be able to be in charge of your system and have independent access.
Trade analytics and reporting are also of great value as they provide insight which can then be used as the foundation for improvements and further development.
How can FX brokers achieve an optimal trading environment?
Achieving an optimal trading environment is a matter of looking into every aspect of your system and optimizing it. As such, technology is the foundation of an optimal trading environment and optimizing every component of your setup will allow you to build the optimal trading environment.
Depending on your liquidity providers’ location, you need to ensure that your servers are strategically located in the same data center suite as your liquidity sources. This will allow you to connect to them via fiber cross-connects which are the most efficient solution in terms of latency. Therefore, if you are streaming liquidity from London, you need to ensure that your servers are hosted in Equinix LD4 as this data center is where all the major banks and liquidity sources are hosted and it is highly likely that your liquidity providers will also be hosted here. In addition, your order routing management system needs to be also hosted in close proximity to your liquidity sources and your trading servers to further minimise latency. By placing all three critical components of your trading environment – servers, liquidity providers, and order management engine – in the same cages you will be able to benefit from ultra-low latency and ensure the best performance for your system.
Of course, if you have clients overseas, delays are inevitable. For example, brokers streaming liquidity from Equinix LD4 with clients in Asia need to find solutions which will allow them to optimise latency. There are a number of ways to achieve this and a technology provider with experience in the FX industry and more importantly, experience in optimising connectivity will able to provide guidance on this matter.
What is the significance of hosting when it comes to creating an optimal trading ecosystem?
Hosting is a fundamental aspect of creating an optimal trading environment as it minimises delays and slippage. Making a wrong decision about your ecosystem’s setup can negatively impact your trading environment with delays and increased slippage, so it is crucial that you choose a hosting provider with experience in building sophisticated ecosystems for the forex industry. Strategically placing your trading servers close to your liquidity and execution engine is a critical aspect of minimizing latency and slippage in turn.
More than that, hosting and partnering up with a cutting-edge provider means running your setup on the latest enterprise hardware which allows your system to handle large amounts of data and tackle bursts. This alone means that you can offer your clients an optimized trading experience. At the same time, provisioning adequate resources on the hosted instances are also critical for optimal performance.
Have you been working on cryptocurrency solutions? Has there been a demand from FX Brokers?
Since last year there has been a real cryptocurrency frenzy which has taken the financial industry by storm, so cryptocurrency solutions have been in great demand. Our development is always driven by our clients’ needs, so to that extent, we have been working quite intensively and have integrated with several of the main cryptocurrency exchanges. We are continuing to do so and we will be adding further integrations to the offering very soon.
What have been the main technological developments that you guys have worked on over the past months and what are you planning to upgrade in 2018?
Our goal has always been to enhance our offering in order to meet our clients’ evolving needs. In that spirit, during the past few months, we have added many new functionalities on the XCore which provide more control and freedom over the system on the clients’ side.
We have also added new connectors which provide more sources of top-tier liquidity for our XCore clients and we are constantly adding new cross-connects upon demand.
We are particularly proud of the fact that the hosting side of our offering has grown by 203%. It proves that all the work that was put into expanding this service – adding new connections and minimizing latency – has paid off.
We are planning a lot of new things for 2018. There are a lot of exciting things on the hosting side that we are eager to announce, while we are also working on adding further functionalities to our aggregation engine. Our plan is to offer our clients with a complete centralized environment where they can manage every aspect of the trading activity. We are also planning to add new solutions to our offering and we are certain that before 2018 is out, our clients will get to experience a uniquely cutting-edge end-to-end solution.