Now that BT's Global Financial Services unit combines the data center hosting, traditional telecommunications and Radianz offerings, Pickles says that BT is finding new and innovative ways to reduce data latency for today's most time latency-sensitive trading applications. "When a financial firm works with us and we handle all of their telecommunications and some of their data centers, quickly they realize that traditional protocols, while very good, can be slower than custom protocols." For instance, although IP is obviously widely used and understood, it contains a lot of extra information that may not be needed for a trading message and as a result, it slows the message (although it may only slow it for milliseconds). "So when we work with a client extensively, they start to ask if there are faster ways to communicate and they want to start stripping away unnecessary information (IP data) from standard messaging." The result is a faster custom protocol that the firm uses internally between applications.

And for traders, sometimes speed trumps all. SWIFT's protocols are considered the standard for global payments and are used by many institutions for securities transactions, but for certain types of computerized and algorithmic trading, the protocol can be too bulky. Sure, the messages are secure and the counterparty is legit, but the latency can be deadly. Add a few hundred milliseconds to a message and algos can lose out.

Still, currently, as reported from this year's SIBOS 2007 conference in Boston, 39.4% of traffic on SWIFTNet is in securities. Securities message traffic is also the second largest industry behind payments (53.4% of SWIFTNet message traffic). Also, securities messaging is the fastest growing market for SWIFT, expanding at a 30.8% clip in 2007. However, in 2006, securities traffic represented 45% of SWIFT's messaging volume, so the while the overall number of messages increased, payments traffic grew faster last year. So where does this leave SWIFT? Well, obviously, the growth is outstanding and seems to be maintaining growth year over year. Last year, securities traffic grew 30%. However, with more and more investors looking to algorithmic trading and worried about data latency, one wonders if SWIFT can maintain 30% plus growth numbers in the securities space.

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