In the financial services industry, expectations for network speed and reliability are among the highest anywhere. Telecommunications providers cater to those expectations, tailoring network services that offer extremely low latency and high resiliency. The latest provider to expand its offerings for financial services customers is BT, which recently extended its Radianz Ultra Access service into Chicago.

The purpose of Radianz Ultra Access is to provide a high-speed service that provides ultra low latency connectivity between exchanges and brokers. It builds off BT’s existing financial services extranet, which is the basis for the company’s Radianz portfolio of services. The Radianz network is a shared infrastructure, run by BT, which targets firms that publish or consume market data, including market exchanges, investment managers, hedge funds and other financial institutions.

“The whole concept of a shared infrastructure, or extranet, is that it gives people a means of distributing their services without the cost of dedicated infrastructure,” says Kevin Covington, head of product and propositions at BT Global Financial Services. “It gives users consistent service levels and more importantly, it gives members a better total cost of ownership because they’re accessing multiple services from a single infrastructure.”

Ultra Access takes it a step further, linking the Radianz extranet with BT’s local hosting sites, which provide remote users a way to benefit from geographic proximity to sites disseminating the market data. BT first offered Ultra Access in New York. With the Chicago expansion, users will now have nearly sub-millisecond access to market data and execution venues including Chicago Board Options Exchange and IntercontinentalExchange.

“We effectively built a very high speed fiber-based network to connect the venues, the customers and the proximity locations,” Covington says.

BT cites TABB Group research that estimates if an agency-broker's electronic trading platform is relying on a service that’s five milliseconds behind the competition, it could cost the firm up to $4 million. Ten milliseconds of latency could potentially result in a 10% drop in revenues for a firm, BT adds.

“One of the key reasons we’ve all gone down this road is because many organizations have demonstrated, and gone public with fact that milliseconds equate to not only revenue but also profitability. The ability to make trades and fill orders is partially dictated by the latency that you experience,” Covington says.

Ann Bednarz is associate news editor at Network World.