New York – January 25, 2012 – Financial extranets are playing a critical role in today’s trading environment, enabling market participants to capitalize on the opportunities created by market automation, globalization and fragmentation, according to a new research report released this week by TABB Group. The report, which IPC Systems, Inc., a leading provider of voice and electronic trading communications solutions, has arranged for distribution rights, examines the role that extranets play in providing capital market participants with access to trade lifecycle services.
The TABB report, “Financial Services Extranets: Connecting a Fragmented Trading World,” is available at http://bit.ly/ytvqLj.
“TABB’s research report confirms that extranets represent the ultimate form of scalable, on-demand connectivity resources,” said Michael Speranza, senior vice president, Global Product Management and Marketing, IPC. “With the globalization of institutional capital markets and the additional complexity that comes with automated trading, extranets will continue to provide unrivaled value when it comes to connecting individual market participants to the community as a whole.”
TABB estimates global sell-side spend on extranet connectivity was $2.34 billion in 2011, representing 45 percent of that market’s $5.2 billion total global spend on communications overall.
“It is no longer feasible for most firms to manage their own networks of direct connections to the increasingly fragmented trading world,” said Alex Tabb, a partner at TABB Group and author of the report. “Extranets provide firms with a scalable mechanism that allows them to manage their communications infrastructure as needed, without having to invest massive amounts of up-front resources into proprietary communications hubs. At the same time, extranets allow market participants to connect to a global network of market participants, exchanges and independent service vendors (ISVs) within a tailored infrastructure.”
The report covers six essential qualities that capital market participants look for in a financial extranet provider: a global community; secure, reliable, high-performance networks; access to value-added services; superior customer service; cost competitiveness and an exclusive focus on the capital markets on the part of the provider.
“We believe extranets will continue to see positive growth over the next few years, as new frontiers are incorporated into their networks,” Alex Tabb said. “But in the end, what will separate the individual extranet service providers from each other will be their own individual offerings. These offerings will continue to focus on the six elements of the value chain that will remain a constant concern for all parties interested in connecting to the FS community.”
IPC’s financial extranet service, Connexus, is part of the IPC Financial Markets Network service portfolio which also includes private extranet and Direct Connect data services, as well as Trader Voice and Enhanced Voice Services. IPC’s Financial Markets Network interconnects global financial centers and allows access to more than 4,000-market participant locations in over 700 cities in nearly 60 countries. Connexus leverages a highly scalable, reliable and secure Multiprotocol Label Switching (MPLS) platform which adheres to financial industry standards such as the FIX protocol.
IPC Systems offers high and low touch trading communications solutions to the global financial trading community including the top investment banks, hedge funds and investment managers in established and emerging markets. With 100% focus on this sector and nearly 40 years of expertise and an unrivaled record of innovation, IPC provides customers with unified solutions that support collaborative voice trading and real-time electronic trading and market data connectivity. IPC’s market-leading offerings include the first unified communications/application platform, award-winning hard and soft turrets, electronic connectivity services including enhanced voice services, business continuity solutions, and follow-the-sun service and support. IPC’s global reach extends to more than 58 countries – including a Financial Extranet of 4,000 on-net locations in over 700 cities and more than 115,000 turrets deployed worldwide. Headquartered in Jersey City, New Jersey, IPC has approximately 1,000 employees located throughout the Americas and the EMEA and Asia-Pacific regions. For more information, visit www.ipc.com.