Cyber Threats: A Growing Risk To The Capital Markets

Daniel Friel, CIO, International Securities Exchange Holdings, Inc. (ISE Holdings)

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Challenges in technology to meet enterprise needs in 2014 and expectations

The exchange industry is more competitive than it has ever been. As technologists, it is our job to fuel the business by enhancing trading functionality while also maintaining strict cost management. At times, it can feel like a juggling act as we seek to innovate and improve system performance while managing increasing data rates that are pushing up costs. In efforts to aide this process, we are looking at a few new technology solutions in 2014 including PCIe and containerization.

Areas in business environment where solutions do not yet exist

Cyber threats present a growing risk to the capital markets. They’re more frequent, and more sophisticated. As an industry, we have done a good job at taking a proactive approach, for example with the “Quantum Dawn II” cyber-security exercise.

There are also several information sharing forums where the industry can work together to minimize the threat of a cyber-attack.

Trends impacting enterprise business environment

An interesting new concept that we are looking to use more broadly is “containerization.” When we’re implementing new software in trading technology, it is a complicated process to move new software from the test environment to production and ensure full compatibility with all of the existing production components. What containerization does is it provides you with the entire technology environment for that software – everything is self-contained within the container. This structure mitigates compatibility issues and reduces the risk of introducing new software into production. Along with containerization, another trend that will have a major impact on capital markets is hardware acceleration, which allows processing in parallel rather than the traditional sequential model. We are looking at the latency sensitive components of our architecture and seeing where we can apply hardware acceleration.

The role of CIOs today

Since the inception of ISE, our vision is that the technology team should be a part of the business, not a separate entity. One of the things we have done over the past few years is better align technology initiatives with business goals. When we create our technology goals every year, we start with an internal meeting with business heads and ask what is it that they need from ISE Technology? What are some pain points that they are hearing from our customers?

My word for a CIO

After the financial downturn, we underwent a restructuring of the technology division to become leaner and more efficient. It certainly had the potential for significant negative impact, and yet we came out of it on the other side as a better, more efficient, and stronger organization. And the level of teamwork between the groups improved dramatically. A word of advice for fellow CIOs, don’t be afraid of change. As technologists, you will always have to embrace change as long as it is in a strategic manner. And always remember, hire great people, empower them, and stay out of their way.

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