The Financial Service Industry (“FSI”), including banking, securities brokerage and investment companies, is placing a strong emphasis on digital transformation amongst many other industries. Data Center has a critical role in ensuring greater reliability for FSI and ensuring that financial transactions can run smoothly and securely. As competition to attract and retain customers becomes more intense, Digital FSI is also putting greater emphasis on better customer experience, this is where FSIs require Data Center that can support high-speed and low latency connectivity.

Low-latency data center can support faster response time for FSIs digital applications which in turn create better customer experience and seamless services for this industry. What is a low-latency data center, and how can such a data center help the financial industry? Let’s take a deeper dive into this topic.

What is a Low Latency Data Center?

Latency is the speed of a computing system or network in sending data. The faster the computing system or network in sending data, the lower the latency level. Meanwhile, Data Center is a technology infrastructure facility used for data storage.

So, Low Latency Data Center is specifically engineered and optimized to transmit data from system to device with minimal delay, ensuring the fastest possible response time. Many things can be done to reduce data center latency, starting from the distance between infrastructure and users, the speed of the network as well as the proximity between the Data Center to major internet exchanges and network hubs. A data center with low latency will be able to enhance user experience with minimal delay and disruption to the FSI applications.

Why does the financial industry need a low-latency data center?

The first thing we must understand together is that data centers with low latency in general, can ultimately enhance user experience and increase customer satisfaction.

When it comes to data center requirements, some industries can tolerate a certain degree of delays in data delivery, but there are also some industries where speed is an absolute necessity, such as FSI.

For a manufacturing company that data center to store their internal storage application, certain degree of latency to synchronize and track sales data from one branch to another, may not affect their business operations too significantly, because speed is not the main requirement and concern.

However, for a securities brokerage that has to facilitate numerous stock transactions on daily basis and rely on various connectivity, how fast the Data Center can send and process their customers request, will have a significant impact on their customers’ satisfaction and in turn their business growth.
As we know, the ups and downs of financial markets are common, every day many parties evaluate investment decisions with billions of dollars in value.

Latency in a stock trading application system, can cause tremendous losses to customers, due to delays in processing purchase or sales data as compared to their competitors and peers.

That’s why, as quoted from m2optics.com, some stock exchanges and global investment banks are trying to implement “Zero Latency” on every system they build to minimize delay and enhance response time of their applications. This initiative will only be possible by having a well connected and low latency IT Infrastructure that minimise latency and enable real time trades for all of the participating securities brokerage.

Conclusion

From the discussion above, we can conclude that speed or latency significantly influences the financial and banking industry, because data delays can cause potential losses to many parties. A low-latency and well connected data center is an absolute necessity to help FSI reduce unwanted losses and optimize their customers’ experience.

EDGE DC, a well-known low-latency data center provider located in downtown Jakarta, is ready to help the financial industry overcome this problem. Get to know EDGE DC’s services from our team by filling out the form below.