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Picture: ISTOCK
Picture: ISTOCK

The financial sector was one of the earliest adopters of flash storage. The explanation is simple: in that industry, speed is a competitive advantage.

Equities trading provides a good example. As traders began moving to automated systems, the speed of equities transactions increased until they were completing in milliseconds. Human traders could not keep pace, which placed the emphasis on fast IT infrastructure. A few milliseconds could translate into a significant competitive advantage.

You might have thought random access memory (RAM) was the answer – and it was, initially. However, RAM is fast but volatile. To reduce risk and meet legal requirements – such as US Securities and Exchange Commission requirements for securities exchanges and member organisations (like stockbrokers) to capture and maintain consolidated audit trails of US transactions – equity trading applications have to record every transaction to non-volatile media.

Flash is non-volatile, which means that when you turn off the power, no data is lost. Also, flash storage such as the IBM FlashSystem 900 can achieve responses times (latency) of less than 100 microseconds. That is slower than current DRAM latency, but still an order of magnitude faster than automated stock trades complete.

Other evolutionary and competitive forces were also at work in the financial industry. Banking systems, for example, began moving from pure systems of record to “systems of engagement” such as online and mobile applications. This new breed of customer quickly demonstrated a new level of impatience – no standing stoically in long lines for the online shopper. Applications had to respond quickly or customer dissatisfaction and even loss could result.

Few industries have been more affected by the revolution in online social engagement than the insurance industry. Only a few years ago, few consumers bought insurance products online. Today, most do. Insurance companies face many new business challenges, including multiple billing plans per state, mobile payments, PayPal transactions, and intense pricing competition, to name only a few. Online carriers are proliferating and they must offer customers the ability to make real-time policy changes and then see accurately updated rates and billing schedules immediately – or these internet-savvy users may quickly click to another carrier.

The risk and market assessment requirements of financial services enterprises have also fostered an industry-wide adoption of data analytics tools. Learning today where markets are trending and what risks lie ahead is much more valuable than learning it next week, intensifying the advantages of fast IT systems. 

The financial sector is diverse, encompassing businesses ranging from traditional hometown banking to investment and wealth management and global securities exchanges. Although their business models and operational environments vary, most members of the industry have something in common: the need for non-volatile, high-performance data storage.

Flash fits the bill. It’s non-volatile. Current flash arrays such as the IBM FlashSystem offer latency in the microsecond range – an order of magnitude, or two, faster than conventional storage a few years ago. Flash burns less power and takes up less space than mechanical disk storage.

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This article was paid for by BCX.

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