Global Spend Mobility Mitigates Risk in Light of Brexit

With political and economic uncertainty plaguing the global financial system, it is more important now than ever for managed services providers to offer flexibility and agility for their clients. Perseus Global Spend Mobility (GSM) mitigates risk – providing our clients with the ability to reallocate existing spend to any on-net service in any of our locations around the world in a matter of days.

Even before the UK actually voted to leave the European Union, Brexit was stirring up concerns for many companies with presence and operations in the nation. HSBC had stated it would consider moving around 1,000 employees from its trading, corporate banking and investment banking units. Similarly, BATS Chi-X has said it would potentially move some or all of its operations from the UK to the European Union, highlighting the “unfavorable business environment” this would create for firms operating in the UK and doing business in the EU. And the latest to join this trend, JPMorgan has announced it could be forced to move thousands of employees out of Britain if the UK loses its “passporting” rights to sell financial services freely in Europe.

Now that the vote has been decided, what is the cost and associated timeline involved in making such drastic changes to your firm’s operations? While BATS Chi-X had noted back in February that the “related costs and expenses could have a material adverse effect on our business,” I am here to prove otherwise.

Let me walk you through our most recent example of one client leveraging Global Spend Mobility to mitigate risk in the face of a potential Brexit. About a year ago, an Asia-based metals broker came to Perseus without any trading infrastructure in the UK and wanted to begin offering services to European customers. As such, we implemented the full suite of LiquidPath services including colocation, managed infrastructure, PrecisionSync time nodes, network between Chicago, Hong Kong and London, as well as CME and LME market data feeds in London’s LD4 data center. As the Brexit decision neared, the firm feared that regulatory changes would impact their ability to offer services to European customers from the City of London. In the month since the UK officially decided to leave the European Union, the firm exercised their GSM option to relocate their European operations to Frankfurt. With a simple phone call, Perseus was able to turn down the services in LD4 and turn up those same services in Frankfurt’s FR2 data center. There was no cost to the client and they are free to continue serving European customers regardless of how and when Britain negotiates the terms of this breakup.

The consequences of the decision are still unknown, but as discussed in a previous blog post, it is essential for firms to maintain flexibility without the risk of large capital expenditures and long-term contracts typically associated with setting up or moving infrastructure. 

While the British seat in the EU summit is still warm, France and Germany are already vying for its title as the European financial hub for clearing and all the additional trading services that come with it. With a two year clock on exit talks, a decision will likely not be made any time soon, leaving European and global financial companies in a precarious situation. Programs like Global Spend Mobility can help you stay out of the guessing game and provide you with the flexibility you need to quickly move your operations and infrastructure as the Brexit dust settles across Europe.