Peer-to-peer technology may be getting pooh-poohed in some circles, but not with First Union bank’s fixed income derivatives group.
New York’s DataSynapse, which helps customers harness idle and underused computing in their network, has a deal with the bank designed to help it shorten trading and post-trading processes known as straight through processing (STP).
The $254 billion-asset First Union, which recently announced it would merge with another North Carolina neighbor Wachovia Bank, is looking to improve its portfolio risk analysis from a once-a-day job to near real-time cycles.
Joe Belciglio, a managing director of First Union’s trading technology group, said the goal was to wring more revenue from its trading desk, which meant looking for ways to improve the bank’s distributed computing architecture.
It decided to marshal underused processing power within networked PCs in its capital markets areas and link those cycles to other trading applications. The result, said the bank, is that compute times have gone from many hours to minutes for even the most complex asset classes.
“As an added benefit, leveraging the idle capacity of our existing network resources lets us evaluate new strategies and model innovations we didn’t have the resources for previously, giving us a competitive edge,” Belciglio said.
Peer-to-peer computing is often associated with music file-sharing program Napster. But when the level of risk management available for a bank’s equity and capital markets trading operations depends on its ability to harness computing power and speedily analyze exposure, P2P technology takes on a whole new meaning.
The deal is a big step forward for DataSynapse, which was launched by a group of Wall Streeters with heavy technology experience. The start-up is moving out of beta tests focused on harvesting broadband power across networked PCs and getting more notice from potential customers in the financial services industry.
Backers of DataSynapse include Rare Ventures; NeoCarta Ventures; The New York City Investment Fund, Silicon Alley Venture Partners and Wand Partners.
