Optimising Exchange Connectivity for Tier 1 Bank
A Global Tier 1 bank approached Citihub to review its exchange connectivity infrastructure, which supported both US and European trading operations. In the US, the review was taking place in tandem with a large-scale data centre migration project. The bank was moving many of its core systems to a purpose-built facility in New Jersey, which was optimally located between the NYSE and Nasdaq co-location facilities.
The bank had been operating two separate hub-and-spoke network architectures, one of which supported its latency-sensitive trading and market making functions, with another supporting all other realtime enterprise applications. Furthermore, a number of its existing agreements with network providers had been negotiated several years ago, so the cost of its exchange connectivity infrastructure was far higher than necessary.
How Citihub Helped
Citihub began by conducting a thorough evaluation of the bank’s current network architecture, along with a review of the costs it was incurring operating the connectivity infrastructure. Our consultants quickly ascertained that the bank was paying too much, and went about designing a new connectivity architecture that would offer a significant improvement in terms of cost, performance and resilience.
The new architecture was based on a mesh network that would consolidate all the bank’s exchange connectivity, rather than maintaining two disparate hub and spoke networks. In order to cater for its most latency-sensitive trading applications, the bank decided to create a separate cage within its proprietary data centre, which would lie outside of its enterprise firewall, thus enabling faster connectivity. Citihub supported every aspect of the migration, from design and sourcing through to implementation. The result was a faster, more resilient connectivity infrastructure that cost less.
The new exchange connectivity architecture offers better performance in terms of latency and throughput, taking advantage of dark fibre links between the bank’s proprietary data centre and nearby exchange co-location facilities.
The new network architecture didn’t just offer better performance, it was also more resilient. The fully redundant mesh architecture ensured there were no single points of failure; in addition to dualsourced lines into each exchange, the bank also deployed NYSE’s SFTI infrastructure as a back-up to ensure it could failover to a third party in the event of a critical outage on its own network.
Citihub also identified and captured significant cost savings as part of the project. Our consultants went through a thorough sourcing exercise, defining the bank’s requirements and selecting the right providers to meet those requirements. In some cases, contracts were re-negotiated with existing service providers, while other contracts were terminated because they had become uncompetitive. By consolidating the exchange connectivity infrastructure for all the bank’s applications (across both latency-sensitive and non-latencysensitive activities), Citihub was also able to streamline the teams required to support the connectivity infrastructure.
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