Voice, compliance and data
Voice over IP has been used in the trading environment within financial markets for some time now. However, it is surprising that some technologists are still coming terms with the convergence of technologies across the trading floor.
The latest regulatory recording solutions, most of which are now software based and SIP compliant, are a good case in point. As soon as a recording is made, it becomes data and subject to new technical considerations and rules.
traders use more and more media
As we have seen in the UK recently with the recording of Mobile phones for trading activities, which covers voice as well as SMS, the FSA (the UK regulatory body) were very aware of the change in trading communication culture where voice is only an option in a range of communication channels.
Going forward, we expect that recording for the regulatory bodies will need to take into account “multi-media over IP” including voice, IM, SMS and video as well as factoring in social networks and email.
Clearly, this will have an impact on the range and quantity of data being held, but it is also important that this data can be merged with other systems related sources (i.e. payments or transaction messaging). In order to provide a comprehensive picture of trading activities that can be “cut and diced” in different ways to assist in monitoring or investigations.
big data or the consequences of this “infobesity”
This increased volume of data is further impacted by data retention periods. Whilst today we are looking at roughly 3-6 months on average (with 5-10 years in some cases), recent discussion around new and emerging rules (such as Dodd Frank or MIFiD 2) are setting a scene where the averages for retention periods are closer to 3-5 Years.
Now with more data being held and need for this data to be retained for as much as 20 times longer than previously, we arrive at the issue of ‘big data’, which is being flagged as the next big challenge for the IT infrastructure.
How will firms cope with such an increase in requirements, especially as for many this is becoming more of an enterprise wide and global need? Managing levels of available disk space is tough too, particularly if the firm has to account for unforeseen ‘spikes’ in data storage use due to periods of high activity in the markets or seasonality in their business activities. Finally, once the data is in place, it needs to be securely managed whilst accessible to authorised sources, wherever they may be, in a timely and reliable manner.
what issues big data unveil
In this age of cloud based platforms with “service as an infrastructure” options, perhaps the answer to these challenges lies outside of the firm with a specialist service supplier. These suppliers propose the reliable and secure management of data, whilst providing an open scalable data source with straightforward access, which customers can utilise as and when needed.
Overall the market still needs reassurances in respect of resilience and, most importantly, security. However, implementing technology infrastructure as a service along the lines of other business utilities is fast becoming a realistic possibility for many.
Another consideration on extended periods of data retention is; will you be able to manage your data in the future? Perhaps unthinkable that any of our data may be lost in the future due to the progress of technology. However, we are getting close to this situation today with management of recordings on tape, especially where 5 or 10 year retention periods are still in force.
Options do exist for conversion to a more useable medium, but come at a price and must be controlled carefully so that the relevant regulators are satisfied that records were transferred accurately. For the majority of firms this is more of a legacy issue, although still another data-related challenge that needs a pragmatic solution for the remaining workable life of that data.
Overall, this whole discussion highlights the need for technologists within the firms to grasp this convergence, as some already have, and put practical solutions in place.
The underlying principal will be to apply proven, well founded techniques and technologies that are already in place for new and emerging challenges…..the true meaning of technology innovation, or just part of the day to day challenge of managing telecommunications in a converging world?
March 6, 2013Infinet Financial SystemsWell Adaptive Trading Platforms are also in trends. It represents a major change in industry over Voice solutions and Voice trading will become more flexible, cost-effective and powerful in this age.