Proximity Matters When It Comes to Speed! 

How direct interconnection to AWS is accelerating financial transactions

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The interactions among financial services companies are like a high-endurance sporting event. Much like last month’s Tour de France, cyclists who “keep up with the pack” can see big performance gains. In fact, cyclists who are part of a peloton’s “pace line” can save up to 40% in energy expenditures as compared to cyclists who are not drafting with the group. Effective drafting requires a cyclist to be as close as possible (within inches) to the bicycle in front of him/her, because a shorter distance equals a larger decrease in wind resistance.

The same can be said of financial services ecosystems and their participants (buyers, sellers, market data providers, etc.) the closer they are to each other and the digital services they require to perform transactions at the speed of light, the more profitable they are. But accelerating financial services data and application workloads not only takes being close to the right business partners, it also means being proximate to networks, clouds and other financial service providers that specialize in meeting the digital needs of the industry.

Take the Mexican Stock Exchange, for example. It is the first Latin American exchange to deploy a point-of-presence (POP) in Equinix’s Secaucus data center campus (in NY5). By doing so, the Mexican Stock Exchange was able to interconnect with Equinix Financial eXchange, a dense ecosystem of financial market participants operating within that hub, where there are more than 350 financial firms, 30+ execution venues and 60+ specialized financial services vendors. (See diagram below). The Mexican Stock Exchange can now provide its U.S. clients with access to market data from its new multicast data feed for electronic equities and derivatives market providers. Close proximity to those financial firms, combined with access to the broadest choice of networks (more than 60 in the Secaucus campus and 200+ via the Equinix Metro Connect), and the ability for customers to directly connect to the data feed, has allowed the Mexican Stock Exchange to accelerate its market data distribution with 75% lower latency.

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Accelerating access to AWS for greater performance

Each player in a financial services ecosystem is dealing with specific workloads with their own set of characteristics. For example, high frequency traders are like sprinters, creating short bursts of trading traffic within a single day, while capital investors are more like marathoners, generating trading traffic at a steady pace over years. Today’s global digital economy requires financial services ecosystems to deploy an interconnection strategy that can effectively and efficiently handle both types of workloads anywhere in the world with consistent performance.

Today, not all financial services workloads are destined for the cloud, due to data security and sovereignty concerns. But for those applications that are, the choice of cloud service provider is critical when considering moving financial services traffic to the cloud. Amazon Web Services (AWS) is helping financial services firms worldwide accelerate go-to-market speed, automate and strengthen security, increase stakeholder value, improve customer experiences, and lower costs. And a major milestone in enabling financial firms to accomplish these goals is the availability of AWS Direct Connect cloud service in Equinix’s New York and Toronto International Business Exchange (IBX®) data centers.

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AWS Direct Connect, combined with the Equinix Financial eXchange, allows companies to interconnect their customer-owned and managed infrastructure directly and securely to AWS, establishing private connectivity to the cloud that can increase performance and deliver a more consistent user experience, while reducing costs. These two IBX data center locations bring the total number of Equinix global metros offering the AWS Direct Connect service to eighteen worldwide.

Platform Equinix™ allows our financial services customers to bring networks, security, data and applications closer to AWS and reach most global markets almost instantly. For example, iZettle is a Stockholm-based company that offers businesses an easy, secure way to take payments on mobile devices via computer chip-embedded payment cards. It operates its IT infrastructure and interconnection to the AWS cloud for its payment processing in U.S., Mexican and European markets within Equinix IBX data centers. By moving its mobile payments operations to Equinix and AWS, iZettle lowered its average network latency from 98 milliseconds to 73 milliseconds and cut its estimated transaction processing times in Mexico by nearly 50%.

Interconnection to network providers powers financial services ecosystems  

Most financial services clients select a data center colocation based on proximity to execution venues and market data sources. But equally important is interconnection to network providers.

Our New York Metro Campus boasts more than 125 different networks, carriers, dark fiber providers and extranets. This diversity creates opportunity for Equinix clients to design networks and select carriers based on their specific business drivers, such as high bandwidth, low latency, global connectivity, cost control or a mix of these priorities. Scalable, high-bandwidth, low-latency connectivity between or among any of these parties can be brought up live in 24-48 hours. In addition, carriers in the New York Metro data centers connect to all the major financial centers in North America, Europe, Asia and Latin America. By interconnecting with international carriers directly, clients can bypass third-party networks to improve performance and reduce latency.

For example, global algorithmic trading service provider itarle wanted to move from on-premises storage to a hybrid model – part hosted, part private cloud, part on-premises. By colocating in Equinix’s Hong Kong data center (HK1) and its London Slough Campus and leveraging the Equinix Cloud Exchange, itarle gained storage scalability, secure access to AWS and the most direct access to financial clients, reducing the time to connect with customers from weeks to a single day.

Controlling the cost of interconnecting financial services to customers

Because of the carrier density inside Equinix facilities, our clients do not incur local loop charges to establish connections. All that is needed is a cross connect (up to 10 Gbps), which represents substantial savings and increased capacity, compared to local loop connections. Also, the broad range of network service providers and peering options within Equinix IBX data centers worldwide provides a competitive choice of services and prices for companies on a global scale.

Proximity is giving our financial services customers a competitive advantage by accelerating access to ecosystem partners, customers, and critical network, cloud and specialized service providers to win more business.

You can learn more about Equinix interconnection services to AWS at the upcoming AWS Summit, taking place in New York City on Aug. 14 at the Jacob Javits Center, Booth #118. Or visit our AWS partner page.

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