More pressure

Cloud computing appears to be moving to the next level with Wall Street firms preparing to license NYSE trading systems in the cloud to outsiders meaning that a much wider segment of the population will be able to access to specialized trading software hitherto only available to a select set of companies. Looks like this could further concentrate more power in the hands of NYSE members and spell the demise of smaller brokers and I imagine the same would happen in Australia if a similar system was introduced here.

Juicy frontier   

Looks like there are quite a few opportunities for financial technology companies in Asia-Pacific if you believe forecasts by Thomson Reuters. High frequency trading is expected to increase from 15% of volumes to about 20% by 2015 but algo trading and smart order routing are expected to almost double in the same timeframe. Given that there is a wide array of markets in the region all with different regulations that would need to be catered for I can see a lot of development (consultancy ?) dollars will be spent in the next few years.

Challenging frontier

While Asia-Pacific may look attractive on the surface there are still a lot of issues that will need to be ironed out to ensure the region can accommodate HFT, algo trading and the massive data volumes they produce. The major problem is the considerable distances involved in interconnecting not only the four main trading centres of Tokyo, HK, Singapore and Sydney but also the many other venues scattered around the region at a reasonable cost. One answer is to share the infrastructure and perhaps this is the real value proposition of companies such as Equinix or trading system companies.