Turrets are on their way out as an effective communications system for the financial services industry. They are expensive, immobile, and outdated compared to the affordable, mobile, and adaptable options powered by WebRTC. In a recent article for WatersTechnology, our president, Greg Kenepp, explored how the WebRTC-backed Cloud9 is leading the new era in trader voice.
At Cloud9, we like to think of trading turrets as the cumbersome, “brick” cell phone that was the predecessor of today’s smart phones – a dinosaur destined for extinction. Turrets, the legacy communication system used in many financial institutions, have rarely changed in their 30+ year history, and now they may have finally met their match in the form of Web Real Time Communication (WebRTC), which provides the backbone of the Cloud9 application.
In today’s financial technology landscape, there are many disadvantages to turrets as a communication system, but some of the primary drawbacks include:
- Turrets occupy significant desk space on already-crowded trading desks
- They account for major equipment and line costs. Average trading turret hardware costs around $10,000 upfront, and often requires private lines that can cost a few thousand dollars. If you’re doing the math, a company with a trading floor of 1,000 people can easily be spending tens of millions of dollars in communication costs.
- In addition, disaster recovery sites are required, so that equipment and the need for private lines can double the cost.
- Mobility is not an option, and it regularly takes several months to implement turret hardware and line connections.
- No way to easily access call recording data that is necessary for the various compliance mandates of the financial services industry.
Despite these disadvantages, many financial services firms are hesitant to adapt to modern, web-enabled solutions. The fact is that WebRTC technology often exceeds the standards for reliability and compliance for the industry, and provides a cost-effective, efficient solution.
A trader voice application powered by WebRTC, like Cloud9, has numerous advantages:
- It allows users in collaborative environments, like a trading floor, to communicate within the organization as well as with outside companies.
- Supports high-fidelity acoustic capabilities, features zero-tolerance for call failure or interruption, and there is virtually no conversation delay
- End-to-end encryption and security
- Fully-compliant audit trail, with capability to record and retain calls
- The mobile capability eliminates need for redundant equipment at disaster recovery sites, as well as the exorbitant cost for hardware and private lines. This can save firms up to 50% in communications costs, without compromising security, quality, or performance.
- Only takes minutes to install and establish connections compared to the weeks, and often months, needed to establish a turret solution.
Not only can the turret be replaced, but it is clear that a modern solution can better address the unique communication needs of a trading floor environment. There are far too many advantages to be overlooked, and for firms that bury their head in the sand, the consequences will be costly.
Our President, Greg Kenepp shares his vision: “In the future, all aspects of communication will be dominated by technologies like this, not only in the financial services sector, but across a wide spectrum of industries where there is a need for highly secure, end-to-end communication, and collaboration. It’s a quiet revolution in the world of communications, but telephony as we know it is on the verge of extinction.”