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Application performance monitoring (APM): aligning business and technology in financial services

Today, almost every activity in a financial services business – trade execution, settlement, clearing etc. – is linked to at least one application and an underlying IT infrastructure. Aligning the two, business and technology, is therefore central to the success of market participants, from stock exchanges to broker-dealers.

Monitoring tools can enable business and technology professionals to better understand the health of their IT estate and how it can impact the performance of business services and processes. Let’s illustrate this through some specific financial services use cases and Geneos, an application performance monitoring (APM) tool designed especially for financial services organisations.

Market data: channel and content

Fundamentally, financial institutions depend on reliable access to timely market data. Support teams, therefore, need to quickly spot developing issues with relevant platforms and proactively respond before internal or external trading desks are affected. For instance, missed updates can manifest themselves as price spikes that can influence how recipients of the data - human and machine - trade the market.

Geneos integrates with popular market data systems, like Thomson Reuters Enterprise Platform (TREP), to monitor various components, including the availability of market data sources across the trading infrastructure and latency between different market data feeds.

Digging a little deeper, Geneos can also monitor a feed’s content, whether published or consumed. The Geneos Market Data Monitor (MDM) plugin can compare data values from multiple sources, reducing the threat of fat finger and other errors that introduce potentially rogue prices. Likewise, MDM can be configured to monitor a set of instrument symbols for update rates and allow users to set up real-time alerts for gaps or volumes that are higher and/or lower than normal. As a result, firms are better equipped to ensure the accuracy and integrity of the data they contribute or use, the benefits of which are numerous.

Transaction flow

As their IT estates have grown in complexity, tracking transactions - whether payments or trade flow - across a series of systems and platforms has become increasingly challenging for financial institutions. It is also increasingly important. Business heads, for example, need a complete picture of intra-day transaction volumes, while traders want to know whether latency is slowing business or actually causing transactions to drop and, in turn, affecting revenues and client relationships.

With Geneos, organisations can gain a complete view of transaction and trade volumes and slice and dice them by, say, instrument, client or location. They can also achieve a full end-to-end view of all systems, which can then be used to highlight problem areas like high latency or a build-up of queues. Hence, when a component exceeds a threshold, support personnel can quickly take action to remedy the issue before it impacts traders and/or the business.

Regulatory compliance and competitive advantage

Post-crisis, the capital markets space is awash with directives and regulations. However, one of the most recent additions to the deluge is Regulation Systems Compliance and Integrity (Reg SCI). Implemented in February 2015, Reg SCI mandates that key market participants, namely execution venues and clearing houses, should have comprehensive policies and procedures in place to protect the market from the vulnerabilities posed by technological problems.

Geneos’ functionality extends across the monitoring spectrum and enables said parties to monitor, in real time, the availability and performance of applications, matching engines, market data feeds, connectivity and various other points of failure. In doing so, market participants can gain greater visibility and control of their essential services and processes, helping them to avoid or manage the costly disruptions Reg SCI seeks to address.

Moreover, as the number and variety of execution venues continues to increase (exchanges, dark pools, ATSs etc.), reliability could be a key factor in determining a venue’s bottom line. Indeed, a loss of connectivity, a spike in trading volumes, or inaccuracies in post-trade reporting can impact revenues and lead to reputational damage. However, with Geneos, exchanges can ensure that all clients are connected when they would expect to be. They can ensure that failover systems start when volumes are unexpectedly high. And they can be sure that all post-trade reporting meets the appropriate regulatory standard. Hence, reliable venues will be best placed to attract new, or retain existing, members.

For more information on Geneos, watch this short explanatory video or contact us for a demo.