Is it possible to maintain effective lines of communication in the event of a catastrophic global nuclear war? Probably not, but hopefully we’ll never need to find out.

While the notion that the internet was designed to survive a nuclear strike may be overstated, the development of ARPANET, the first public packet-switched computer network, was strongly influenced by research on building more resilient communications systems in response to Cold War fears of nuclear engagement.

The global communications network that evolved is revolutionary in ways mid-century techno-optimists never imagined. Decentralised, scalable, flexible, and accessible, the internet is a modern miracle. Early researchers who shared computing power across U.S. universities couldn’t have predicted influencers posting TikTok challenges from wireless handheld devices in Beijing, Paris, or Nairobi.

Caught in a web

But is a decentralised network always the most efficient way to get a message from point A to point B? Imagine you wanted to send a signal halfway around the world in the quickest possible time; how would you do it? Our ability to share information has evolved dramatically through technological advancements — from sailboats and steam power to the telegraph and communication satellites. You can now send a text message across the planet in virtually an instant.

Virtually, but not literally. When you send an email or a direct message from Los Angeles to Cape Town, the information travels at the speed of light (we touched on the physical limits on the speed of communication in a previous post) but it doesn’t go straight from device to device. There’s a complex process of intermediation that makes the universal network possible.

In the case of email, your message is sent to the outgoing mail server, which performs a DNS lookup to determine the recipient’s mail server. The email is then routed through various servers, each following specific protocols (like SMTP, POP3 and IMAP), applying security checks, and forwarding the message to its destination. Once it reaches the recipient’s mail server, the email is stored in their inbox, ready to be downloaded or synchronised according to the recipient’s email client settings.

The wonder of this system is that with an email account and a functioning internet connection, you can send a message to just about anyone else on the planet with a similar setup.

Time is money

But what if every second counts? Consider, analogously, the infamous the Cold War hotline, apocryphally a red telephone connecting Washington and Moscow.

In the wake of the Cuban Missile Crisis, officials at the Kremlin and the Pentagon agreed they could rely on a patchwork system of messaging. They needed a direct line between officials with their fingers hovering above the nuclear button.

Just as resilience and speed were crucial in Cold War-era communication, these same qualities are essential in today’s fast-paced financial markets. A trader with a terminal and an internet connection can plug into global markets literally from the comfort of their homes. But that raises its own complexities.

Ensuring a buy order is processed to the millisecond might not involve the same stakes as signalling that an ICBM first strike is a false alarm – nonetheless, delays can be costly.

The internet makes it possible to trade the world’s markets from just about anywhere, but how do you ensure the process is reliable, safe, and effective? Should traders prefer a scalable network or a secure hotline?

Complex systems, streamlined solutions

That neat binary is an oversimplification, but it helps lay out some of the high-level questions that inform the design of a trading technology solution.

Resilience, speed, flexibility, security and accessibility: these need to be continually assessed, balanced and carefully monitored in an integrated system.

Building a secure global network that minimises latency, while adhering to all relevant legal and compliance requirements, is a complex undertaking.

You need to consider range of technical and systems questions. Technical questions like where the servers are located and how data is transmitted. Process questions like client onboarding and service. And then there’s balancing security with ease of access, compliance protocols with seamless service.

These are not static properties. Liquidity dynamics shift all the time. Compliance rules are constantly evolving. And the risk horizon is never static. Technology needs to adapt to changing protocols; protocols need to adapt to make the best use of the technology.  

In this environment, building your own proprietary technology can confer a tremendous advantage. But it needs a dedicated technology department to ensure the technology meets the demands of the market. No less importantly, the technology department should work hand in hand with client service, sales, risk and liquidity teams (all under the watchful gaze of compliance) to provide a truly integrated solution.

The Finalto advantage

At Finalto, integration is at the heart of our trading solutions. Our infrastructure underpins our ability to offer seamless, efficient liquidity – putting the world’s markets in our clients’ hands.

With data centres in strategic locations around the world (Finalto’s data centres are strategically placed in London, New York and Singapore), where we cross-connect directly with liquidity providers and clients, our systems are designed to be robust, low latency and ultrareliable.

Then there’s our white label solutions, which enables clients to accelerate their business growth, without the need for extensive software development and testing.

But while we’re proud of our technology, it’s only one part of our integrated offering.  

We’re not an award-winning liquidity provider on the basis of our software and infrastructure alone. Our customised liquidity offering is the result of strategic partnerships, developed over years, and the efforts of our multidisciplinary team working together to optimise our service for each client.

Want to learn more? Send us a message and we’ll be in touch to discuss our liquidity, fintech and data solutions – and how these offering work together.

All opinions, news, research, analysis, prices or other information is provided as general market commentary and not as investment advice and all potential results discussed are not guaranteed to be achieved. The information may have been derived from publicly available sources, company reports, personal research, or surveys. Past performance is not indicative of future performance. Trading carries risk of capital loss. Service available to professional clients only