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With High-Frequency Trading, Financial Firms Face New Challenges

In recent years, the financial industry has witnessed a revolution. To discuss, debate, and seek a bit of consensus on the crucial issues impacting the industry, I met earlier this year in New York with a team of experts at the Electronic Trading Innovation Council. For the event, Cisco partnered with the founders of the council, Julio Gomez and Clay Booma. I was joined by my Cisco colleagues Aron Dutta, co-managing director for financial markets, Cisco IBSG; Chris O’Connell, Cisco’s head of strategy for alternative investment markets; and Dave Malik, Cisco’s technology & architecture lead. The other participants represented a wide range of financial and tech-based firms, including BNY Mellon, Citi, Credit Suisse, Lazard Freres, Morgan Stanley, Nomura, State Street, UBS, Equinix, Savvis, and Tervela.

It was a great team, and the roundtable meetings benefited from a vast body of knowledge and a high level of participation. Read More »

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A Cloud over the Global Marketplace

Earlier in my career, I helped Wall Street find cutting-edge solutions to the radical challenges posed by the first great wave of computerization. Today, the changes shaking the financial industry are no less extreme, as firms negotiate the combined forces of globalization and regulation, while adapting to next-level technology that is lightning-fast, hypermobile, and reaching for the cloud.

Several weeks ago, at the 8th Annual High Performance Computing Financial Markets Show and Conference in New York, I outlined Cisco’s vision for the Global Connected Marketplace and the transformational shift in the consumerization of IT that it portends.

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Brains vs. Brawn?

After years of working with financial markets firms around the globe I believe we are heading towards an environment where “High-intelligence trading” will likely replace “High-frequency trading”.  Why, because low-latency is becoming table stakes in the search for competitive differentiation. A firm’s business advantage is going to be in the ability to operate on a global scale and process more complex information sets.  So in today’s markets, it’s not just speed — but span of awareness that counts -- in a search for Alpha. How do firms evolve to  “high-intelligence trading” infrastructure ?   Read More »

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Welcome to the Financial Services Industry Blog

It has been said that Cisco became Cisco by helping evolve the financial services industry over the past two and half decades. This has not been a one-way street as the financial services industry has consistently been the largest revenue generating industry for Cisco, including the past five years – even during the global financial crisis. In fact, Cisco is the only network company ranked in the FinTech Top 25 Enterprise Companies serving the financial services industry. FinTech is an annual ranking where the American Banker and Bank Technology News, in association with IDC Financial Insights, rank the revenues of the leading global technology and service providers to the financial services industry.

The financial services industry is going through perhaps its most significant modern age evolution, across all three segments – retail banking, insurance, and financial markets. Dramatic changes in the consumer segmentation landscape, based on the growing wealth and demands of the Gen X and Y crowd, along with business model shifting regulatory requirements, are causing major changes in investment philosophy among consumer-oriented financial institutions. In financial markets, a new ecosystem is emerging, characterized by network enabling FMaaS (Financial Markets as a Service), mergers of major exchanges to establish a virtual global exchange or “Meta Exchange”, resulting in a global inter-connected trading fabric. What does all of this mean? Lots of risk and lots of opportunity.

So why did we create this blog? Who are the people contributing, and what are their backgrounds? Why would you be interested?

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