Cloud Computing Adoption Redefines Quality Standards for High-Frequency Traders

More and more enterprises now rely on cloud computing for infrastructure and applications. Based on current trends, the cloud computing market will exceed $340 million in revenue this year, the US is the biggest regional spender of IT services. According to the latest research, cloud servers host over 40 zettabytes of data, and around 90% of companies use some sort of cloud services.
Feedback from enterprises seems to be overwhelmingly positive: insights from Accenture revealed that 96% of IT leaders were satisfied with cloud outcomes, and 75% of them said that cloud services have become critical to their business operations. When we think of cloud computing, we tend to associate them with industries such as automotive, education, and healthcare, but cloud computing has expanded its reach in all sectors. One that doesn’t get spoken about a lot is trading. Many traders are now aware of this, but the fact that trading is so widespread today is because of tech innovations, and the innovations brought forward by cloud computing in this field are truly revolutionary.

Table of Contents 1 Introduction 2 Security of Trading Platforms 3 Better Trading Conditions 4 Superior Computing Infrastructure

 

Cloud Computing Boosts the Security of Trading Platforms

 

In the past years, cybersecurity experts have observed a sharp increase in the rate of cybercrime attacks, and it doesn’t come as a surprise that any finance platform where users can deposit and withdraw big amounts of money will be targeted. No one would ever want to trade on a platform that doesn’t keep their user’s funds safe, so every respectable trading broker has already invested in cloud infrastructure.

But migrating a trading platform to the cloud does much more than avoid money loss. Since all data is being stored in the cloud, that means the entire ecosystem is much safer in a different way, and the risk of data breaches is dramatically reduced. In 2021, data is just as important as money, and many hackers target some platforms specifically to steal user data which they can then sell on the dark web. When data is hosted locally, the risk of a data breach is much higher. Hackers thrive on small platforms that don’t have the infrastructure to keep trader data safe because they only notice the breach once it’s too late. The costs of recovery are extremely high, especially considering that the reputation of the company involved will be affected forever. Although migrating to the cloud doesn’t reduce the risk of cybercrime to zero, it is considerably harder to steal user data from the cloud because those platforms invest heavily in firewalls, tokenization, and VPNs to boost security. What’s more, top trading platforms use AI to detect suspicious activity on user accounts so that if an unauthorized party tries to withdraw money on their behalf, they will be locked out.

When a platform is hosted in the cloud, it receives regular security updates, which is extremely important in a time when cybercriminals develop new ways to thwart security systems every day. In 2015, locally installed trading applications had already been flagged as security disasters waiting to happen, and users were recommended to avoid them. In 2021, still using a local trading app means living in the past and putting your money and personal data at risk.

 

Better Trading Conditions for High-Frequency Traders

 

Although trading has existed for a long time and computers have been used in the process ever since they appeared, cloud computing revolutionized what traders could do and offered them more opportunities. More specifically, cloud computing opened a path for high-frequency trading to exist.

High-frequency trading is a type of advanced trading that leverages the power of computer programs to analyze market conditions and place multiple orders at the same time. Casual traders may not be familiar with, but professional traders rely on this technology to do their jobs, and cloud computing has made their job more efficient. Cloud-hosted platforms are part of a large network, so they have higher computing power than any local network can provide. And, since the work is distributed across many servers, if one of the servers fails, another server will pick up the job, so there will be no downtime. In high-frequency trading, every nanosecond matters, and not even a local network powered by a super-computer could achieve the same efficiency as the cloud.

Needless to say, cloud-hosted trading platforms have made it possible for traders to access real-time market insights in real-time and make key decisions no matter if they’re at the office or on vacation. As every professional trader knows, an asset’s value can completely change in a few minutes, and in the case of short-term trading, it’s imperative to take action right away. Thanks to the cloud, that is now possible.

 

Superior Computing Infrastructure Makes More Features Possible

 

You don’t have to be a high-frequency trader to enjoy the benefits of cloud computing. Not even a professional trader, for that matter. One of the reasons why pretty much anyone with a smartphone can start trading today is that the cloud has made trading more accessible and gave users access to great features. When you read reviews about FX & CFD brokers, you probably pay attention to features such as built-in chat for customer support, access to the platform without downloading it, social media integration, live feeds, automatic trading, or social trading. All of these were made possible thanks to the cloud.

In the past, implementing cutting-edge features to trading platforms was much more expensive than it is today, so platforms had to raise their fees to afford them. As a result, trading was exclusive activity, typically reserved for people who worked in Wall Street or were already affluent investors. Now, however, the widespread availability of cloud solutions has made it possible even for small brokers to implement modern features, while still keeping IT spending to a minimum. Considering that brokers already have to pay some hefty fees to keep their license, this definitely helped.

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