eFinancialCareers

Forget the 100 metres in the 2012 Olympics, London's banks have another target in their sights – three milliseconds.

Adam Bennett, managing director of IT consultancy Hatstand, says that's the target for the confirmation of electronic trades on low-latency (super fast) trading systems.

The dream moved a step closer to becoming reality on Monday when the London Stock Exchange unveiled a new electronic trading platform – 'TradElect' – which promises to trade shares in 10 milliseconds.

But while progress is being made, Stephen Feline, a consultant with the Kaizen Partnership, says that despite huge demand for people to work on low latency systems, there aren't enough of them with the requisite programming skills – and banks seem reluctant to train them in-house.

The exception, apparently, is JPMorgan, which is rumoured to be offering 'carte blanche' training for entry-level IT staff in an effort to remedy the low-latency skills shortage.

Darrell Cameron-Webb, senior consultant at the JM Group (Search & Selection), says technologists with the right combination of skills can command £90k a year plus a 20% or 30% bonus.

Bennett says the banks' goal is competitive advantage in trading systems. Implementation of faster low-latency, direct market access (DMA) and algorithmic (Algo) trading systems is being hastened by the expectation that best execution, required under the Markets in Financial Instruments Directive (MiFID), will set the bar high for all financial market transactions.

He adds that banks are already competing for institutional trading volume including DMA and Algo, which already represent up to 50% of transactions on busy days and is likely to rise to over 60% by 2012, matching the evolution of the market in New York.