Getting it right.
In earlier blog posts, we’ve discussed the challenges of implementing efficient trading infrastructure testing systems, and the intricate complexities of their adoption. But once all this hard work is completed, what are the potential rewards to be reaped?
The operational benefits from instituting an enterprise-wide approach to trading system testing go far beyond basic compliance. Firms that embrace a robust testing regimen could find that it strengthens their ability to adapt to future regulatory demands and operational challenges.
On a more immediate scale, as Big Data concepts take hold across financial services, the metrics generated by testing and monitoring of trading infrastructures can yield true business benefits. Firms that fail to adapt could risk losing their competitive edge in a market increasingly differentiated by the quality of operations.
By adding to the trading system performance metrics they already collect, firms have the opportunity to monitor network resource and load requirements and average CPU utilization throughout their infrastructures. Given the different roles played by different servers within the trading system set-up, the servers may have different and constantly changing measurement results for disc utilization, cache size and bandwidth.
A standardized enterprise approach to testing can improve the availability of reliable and consistent IT performance data that can be used to help justify capital investments and other ongoing resource requests. System testing may also provide metrics for decision-making on issues around deployment of cloud-based applications and other alternative configurations.
Elsewhere, testing of high-performance or low-latency trading platforms can give an insight into how firms’ trading infrastructures are performing overall. By including order flow monitoring in the overall testing environment, firms are able to measure latencies alongside other metrics across all applications and infrastructure components involved in the trading process. These measurements can be used to develop predictive indicators over time that can identify problems before they happen and improve execution rates.
By analyzing all points across the trading infrastructure layer, firms can create analytics based on latency information, order flow, traffic levels, message routing, and other factors. These can be used to identify infrastructure issues before they create problems, allowing technicians to react to system blocks and other issues in real time.
Collecting data from test points across the trading environment can support anomaly detection, but also can be used to underpin predictive functions that improve overall service levels. By understanding how the trading infrastructure handles data and messaging – from market data, order and transaction data flow and load capabilities – firms can act to avoid issues in the future.
The testing environment can be further leveraged to analyze real-time and historical trade and order data. Using this data, firms can benchmark key metrics or compare different clients’ performance – and satisfaction – according to a range of criteria. This approach can give practitioners a better understanding of customers’ activities, allowing them to take steps to improve service levels and boost client relationships.
Solutions such as VeriFIX Enterprise by Itiviti can help firms to manage and test on an enterprise scale, automating their testing processes and reducing their reliance on counterparty test environments through real-time report tracking and traceability. Its web-based interface allows users to run and view test cases via their web browser, while test cases execute remotely on an execution agent, facilitating easier maintenance, faster access and extended integration opportunities.
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