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Ethernet: Powering Global Financial Markets

22nd May 2024

In the fast-changing world of global finance, reliable connectivity is essential for traders and financial institutions to stay competitive. Ethernet Day is the perfect time to highlight Ethernet technology. As the backbone of modern Wide Area Networks (WANs), it enables the high-speed, secure data exchanges crucial for trading and financial operations. By understanding the technological advancements behind Ethernet and WANs, financial institutions can better appreciate the infrastructure that underpins their trading activities.

Ethernet was developed in the 1970s and quickly set the standard for local networks by enabling effective communication between devices in close proximity. As financial markets became increasingly global, the technology adapted to support wider network scopes, leading to sophisticated WAN implementations. These networks are essential for connecting multiple geographical locations and ensuring consistent, secure, and swift data flow across expansive distances.

In the financial sector, Ethernet is indispensable for executing high-speed trades and real-time data exchanges across financial hubs such as London, New York, Hong Kong, and Tokyo. They ensure that data not only travels securely but also reaches its destination as quickly as possible – a critical component in algorithmic trading where decisions are made in milliseconds.

As an open standard, Ethernet serves as a fundamental building block for inter-institutional connectivity. By adopting Ethernet, financial institutions can seamlessly exchange communication and data with technologies like multicast and Border Gateway Protocol (BGP), built on top of Ethernet to further enhance communication.

Over time, fibre optic cables have started to supersede Ethernet cables for high-volume or low-latency transactions. While Ethernet cables transmit data using electrical signals, which limits their speed to 10Gbps and distance to 100 metres, fibre optic cables use light, allowing them to transmit data over much longer distances at speeds up to 100Gbps per fibre. Bundling multiple fibres can even push these speeds to over 1Pbps, 1 million times faster than traditional Ethernet cables.

Despite the shift towards fibre optics, the Ethernet protocol remains the standard for device communication over these advanced cables, underscoring its enduring importance in network technology.

The performance of Ethernet networks is paramount in financial settings, where delays in data transmission can have significant repercussions. Networks in this domain are specifically engineered to minimise latency, maximise throughput, and handle the high volume of data involved in financial transactions.

Recognising the specific needs of the financial industry, Beeks offers tailored WAN connectivity solutions designed to meet the high standards of security, speed, and reliability required by financial enterprises. By focusing on the unique demands of capital markets, Beeks ensures that financial institutions can leverage powerful, compliant, and efficient network connections, allowing firms to concentrate on their core business – trading, risk management, and innovation – while we handle the underlying network technology. With Beeks, financial services gain not just a service provider, but a partner equipped to help them navigate the complexities of global financial markets.

For more details on how our dedicated financial networking solutions can transform your global trading operations, visit our WAN Connectivity Services.

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