By Jock Percy, CEO
Most of us take time for granted. Between our smartwatches, smartphones, tablets and computers, time is always available and always accurate, as far as we’re concerned. All of these devices and machines require time on a much more granular level to keep them, and the world as we know it, running. Think back to Y2K; The uncertainty for machines to support a 4-digit year function caused widespread fear and panic that computers would crash and planes would fall out of the sky at the stroke of midnight. While we learned that our machines may be more resilient than we think, we are still obligated to consider the growing importance of precise and synchronized time within all applications.
All applications in a run-time environment, high performance or not, need time attribution in one form or another. With the Internet of Everything upon us, application performance is measured in real-time with data being collected by billions of sensors and devices that are connected all over the world. This data is event-driven, making the sequence of events, measured by precise and consistent or synchronized timestamping, critical for correlating and analyzing the data.
Take, for example, a research firm attempting to determine driver safety in different weather conditions. They might look at traffic patterns, road and safety data from The National Highway Traffic Safety Administration (NHTSA), weather data from national and local weather agencies and engine, and steering and braking performance from the vehicles themselves. In order to correlate the data properly and draw accurate conclusions from all of these disparate data sets we need very precise timestamping.
Linking this back to financial markets, precise time synchronization is absolutely critical for algorithms to appropriately act on market data from hundreds of different global exchanges and data sources. It is ironic that regulators have essentially had to force the issue around auditing trade sequences as the benefits go far beyond compliance and should already be the widely accepted norm for any high performance financial application. While the cost of compliance is often seen as a burden on firms, the utility of time is available at cost effective and even more precise levels than required. With affordable tools such as Perseus PrecisionSyncTM firms will soon be at a significant disadvantage should they continue to ignore the importance of time.
With the introduction and soon to be implementation of MiFID II in Europe, we’ve been hearing a lot of buzz around time synchronization and the millisecond-level reporting required by these directives. Global time synchronization is gaining popularity for its compliance function but I am surprised that more firms, within and outside of financial services, have yet to see beyond the regulatory factors to recognize the importance of collecting real-time and precisely time stamped data.
Given the critical importance of decisions we make based on these vast, correlated data sets, if one datacord is miss-stamped the output decisions of analysis could have significant negative impact. In the earlier example of driver safety, if the transport safety board decides to change traffic signal patterns based on incorrect analysis, we are talking about potentially fatal repercussions. While a car can be programmed to stop in a nanosecond, people cannot react as quickly and with the advancements in driverless vehicles we may see a rise in this imbalance. Similarly, if you trade on bad, old or incorrectly correlated market data signals, firms stand to lose money. For audit compilation reasons, the regulators have already realized the importance of accurate and precise time but you must go beyond compliance to truly gain the competitive edge that time synchronization can offer.