How Colocation Data Centers Help Sustain the Financial Sector

Colocation data centers sustain financial services in a variety of ways.

Not long ago, many financial services companies shifted to high-frequency trading, which uses data-driven computation to take action within milliseconds of new market developments. 

Wall Street firms learned quickly that the tortoise always loses out to the hare. The faster trading data is analyzed, the faster the response to changing conditions. Millions of dollars are lost and gained in microseconds, and expeditious data transfers to and from the data center are of the essence. 

Sure, data zips through fiber-optic cabling very near the speed of light. But a data center in New York can still analyze vast amounts of financial information and get it back companies to on the East Coast faster than one in Washington State. (Sabey even has one right in Manhattan that’s home to a major hedge fund).  

But in the financial sector, proximity isn’t the only factor to success. In fact, low-latency connectivity for real-time data analysis is just one of many ways colocation data centers sustain financial services.  

In addition to options for quicksilver connectivity, colocation data centers provide: 

Operational Excellence

Studies suggest that every minute of data center downtime costs, on average, thousands of dollars. But in the financial sector, it’s more akin to millions – if not hundreds of millions – of dollars.  

Nothing is more important to financial services companies than operational excellence. They expect sustained uptime and complete redundancy for the cooling and power infrastructure that influences the performance of mission-critical servers.  

Traders aren’t the only financiers who value business continuity. We’ve heard horror stories about consumer banks and credit-card providers experiencing downtime, leaving customers unable to access their funds or lines of credit. People’s money is at stake – and a lot of it. 

That’s precisely why operational excellence is a top priority and a core competency of reputable colocation data center providers. Data center operators focus on uptime and redundancy, so that the financiers can focus on finances. 

Security and Compliance

If operational excellence is priority No.1, security and compliance are a close second. 

Colocation data centers implement facility security controls, including: 

  • Multiple layers of physical access controls such as biometric scanners.
  • Security staff on-hand 24/7. 
  • Surveillance cameras and alarms. 
  • Environmental monitoring systems. 
  • Custom security controls upon the tenant’s request. 

Colocation operators also comply with regulations and guidelines such as: 

  • Service Organization Controls 2 (SOC 2): Establishes auditing criteria for controls related to availability, security, processing integrity, confidentiality and privacy. 
  • International Standards Organization (ISO27001): Verifies that an organization has a systematic risk management strategy for securing people, processes and technology. 
  • Payment Card Industry (PCI): Identifies security controls that any organization that stores or processes payment card data must abide by. 

Financial organizations take security and compliance seriously, and so do colocation data center operators.

Total Cost of Ownership

Electricity is the biggest expense of leasing colocation data center space. And the cost of energy is relatively high in a place like Manhattan or New Jersey – which may be worth it in the case of electronic trading.  

However, for less time-sensitive operations such as disaster recovery, financial companies should keep an eye on the bottom line. Operational excellence, security, compliance, carrier neutrality (meaning they can connect to multiple networks) and the reputation of the provider must still be priorities. But so should total cost of ownership. 

For example, one of the world’s largest financial management firms leases a data center in our Wenatchee, Washington campus. Why? Because the cost of energy is about 3 cents per kilowatt-hour. And for operations that don’t require microsecond latency, that makes a whole lot more sense than Manhattan’s 14 cents per kilowatt-hour, or even Ashburn, Virginia’s 6.5 cents.     

Depending on the circumstance, there’s a colocation data center in every region of this country that does what you need for the right TCO.

Financial Stability, Scalability and a Strong Industry Track Record

Last but not least, a good colocation data center provider shouldn’t leave room for doubt as to whether it has the means to fulfill SLAs, the flexibility to scale up footprint as needed and, most importantly, a track record of reliability, efficiency and performance. 

With an unshakeable financial foundation, its own construction company, in-house facility design teams, a focus on modular design, and a sterling industry track record, Sabey Data Centers checks all the most important boxes. 

And we’re happy to help sustain financial organizations, from coast to coast. 

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