For Financial Services, An Outage May Be Preferable to This

It is easy to know when there is an outage.  Things do not work, people complain, and businesses lose money.  It is much harder to know when an application is working, but in a sub-par manner.  These scenarios are harder to identify and fix.  Ultimately, these degradation situations may be costing the company more money than the outages.

The cost of IT and application downtime for business varies.  It is hard to calculate, but it is a safe bet that the financial services industry, especially the business units involved in electronic trading, have the most to lose when an application does not perform due to IT issues.  The electronic trading model shows how it is also important to understand the impact of underperforming applications that may still have limited functionality.

Exchanges like NASDAQ and the CBOE have been using technology to automate the communications between buyers and sellers.  In today’s financial world, there are high volume traders and high speed traders that depend on the accuracy of their information and the ability to react to the changing environments at incredible speeds.  In this business, speed is king and the ability to execute before the competition can make or break someone when trillions of dollars are exchanged daily.

The FIX Standard

These businesses rely mostly on the Financial Information eXchange (FIX) protocol to make these electronic transactions.  At a high level, traders have access to the FIX application to enter and validate their transactions.  These transactions are then sent to the exchanges to be fulfilled.


[You might also like: Sustained Vigilance Key for Financial Organizations in Light of Stable, Steady Threat Landscape]

There is a clear application service level assurance (SLA) impact for financial institutions that are engaged in electronic trading.  An IT architecture that includes application delivery controller (ADC) technologies is essential to maintaining the application SLA.  ADCs provide key technologies to support the FIX protocol.

  • Load balancing and global load balancing to ensure application scalability
  • Intelligent protocol switching based on values within the FIX protocol such as SenderCompID
  • Security through SSL offloading and proxy network address translation (NAT)
  • High availability through HA designs and active server monitoring

Red, Green, AND Yellow

It is not good enough to just keep the network and application up and running in this environment.  Outages are important to understand and mitigate, but it is just as essential to ensure that the application is performing within expected parameters and that the transactions are being fulfilled in a timely manner.  In the electronic trading industry, a delay of milliseconds can change the price and the opportunity to execute a trade at a favorable rate.  The performance of the network and FIX application directly impacts the money that the business is able to make.

The business needs tools to monitor the overall end-to-end application performance to determine when there is a degradation in performance.  This monitoring must provide insight into the cause of the degradation to allow the IT organization to rapidly respond and mitigate the issue(s) causing the problem.

In the financial services world where high performance electronic transactions have become standard, IT operations are not just a world of green and red, being up or down.  There is a wide swath of yellow in between, where the network and application are available in a sub-optimal condition.  These are the situations that need to be identified and addressed.  This insight into performance degradation and mitigation directly affects the business and their value.


Read “Keep It Simple; Make It Scalable: 6 Characteristics of the Futureproof Load Balancer” to learn more.

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Frank Yue

Frank Yue is Director of Solution Marketing, Application Delivery for Radware. In this role, he is responsible for evangelizing Radware technologies and products before they come to market. He also writes blogs, produces white papers, and speaks at conferences and events related to application networking technologies. Mr. Yue has over 20 years of experience building large-scale networks and working with high performance application technologies including deep packet inspection, network security, and application delivery. Prior to joining Radware, Mr. Yue was at F5 Networks, covering their global service provider messaging. He has a degree in Biology from the University of Pennsylvania.

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