Leveraging the Cloud to Support Increased Trading Volumes

To move to the cloud or not to move? That is the question many brokers are facing because of the record pace of trading volume.

Retail trading spiked after the elimination of trading commissions in October 2019, then continued to rise last year as investors were stuck at home in the early days of the Covid-19 pandemic, followed by a social media-fueled surge in January.

A recent Ignites article, “Record Trade Volume Sends Brokerages to the Cloud,” discussed how brokerages have acknowledged the need to increase capacity in their systems after record trading volumes caused delays and outages multiple times since the start of 2020.

The article also notes that while firms have invested in the technology required to rout orders to markets, processing orders once the trades come back remains a bottleneck as most big brokerage firms rely on a traditional, “IBM-mainframe environment to process trades”.

Cloud services can help.

Such technology builds more flexibility into brokers’ capacity management, enabling them to ramp up or down as needed. What’s more, leveraging the cloud can enhance customer satisfaction and engagement by dramatically decreasing the likelihood of encountering outages or delays.

We, at Mediant, agree. Our technology platform, MIC, serves as the workflow engine for all processes and was built from the ground up to support growth. Our platform is cloud-based utilizing Amazon Web Services (AWS), which has become the gold standard for the financial industry, adding agility and scalability. Plus, the architecture allows us to adapt as needs evolve as well as regulations.

Because we are in the cloud, we can accommodate the increase in client communications that results from increased trading volumes—and have done so seamlessly since the spike in retail trading.

Distributing client communications is operationally complex and highly regulated. When distributions are triggered by an unscheduled activity—like the elimination of trading commissions or an ongoing pandemic—volumes can reach into the millions and record-keeping requirements become even more onerous. Having the right technology, as well as the experience and processes enables us to create and effectively distribute engaging client communications. In addition, we believe that client communications not only fulfill an obligation but also engage shareholders.

For more information, contact us.