Complex Event Processing

Looking Beyond Algorithmic Trading
by Muralidhar Dasar, April 16, 2012
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

Complex event processing (CEP) is emerging as one of the hottest technologies in the trading space. The market size for CEP solutions in financial services industry is around US$115 million and expected to grow by around 30% every year for the next two years.

In the last couple of years, data volumes have increased exponentially, with increasing automation of trading processes. Trading venues and firms are upgrading their IT infrastructures to handle large data volumes, as they are pressed to expand their data processing capabilities, resulting in a growing need for sophisticated analytics for mining large volumes of data. The financial crisis of 2008 also increased demand, as CEP is being used for continuous and more granular risk monitoring applications.

In a new report, Complex Event Processing, Celent analyzes the growing interest in CEP technology. The technology is increasingly being adapted for a wide variety of use cases in financial services industry. Although its earlier use cases were concentrated outside of financial services, its ability to issue high speed responses to specific patterns or triggers using real-time data is making it very attractive to capital markets players.

“Trading firms are using CEP as an enabling technology to support a variety of operations around trade execution, and in spite of the advantages that come with real time capabilities of CEP and its high sophistication, they are reluctant to hand over trade execution itself to automated systems,” says Muralidhar Dasar, Celent Analyst and author of the report. “CEP vendors need to look beyond algorithmic trading; there are a large number of use cases of CEP capable of adding significant value to organizations.”

This report discusses the market uptake of CEP solutions and its applications in capital market firms. The report also highlights the ongoing consolidation in the CEP market, the entry of large technology players, and the product positioning and features of leading CEP offerings.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Market Overview

7

 

Explosion in Data Volumes

7

 

Real Time Technology for Handling Big Data

9

 

Market Size

10

Technology Overview

13

 

The Search for Competitive Advantage

13

 

CEP Architecture

14

 

A Different Approach to Data Processing

15

 

Conventional RDBM Makes Way for Memory-Centric Data Management

16

 

Event-Driven Architecture

17

 

Layers of CEP Architecture Build Vs. Buy

18

 

Solving for High-Speed Using CEP: The Many Layers of Underlying Technology

19

 

CEP Solutions Ecosystem

20

 

Consolidation in the CEP Market

22

CEP Applications in Capital Markets

24

Conclusion

27

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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