Merrill Lynch Trades Up to VoIP

Financial services giant Merrill Lynch will roll out roughly 4,000 IQ/MAX trading desktops—running a VoIP-powered system from IPC Systems, a provider of trading floor communication solutions for the financial services industry—at its trading centers in London and New York.

Financial terms were not disclosed, but insiders estimate that Merrill Lynch spent around $100 million on the systems. Implementation is expected to occur early next year.

IPC was the first company to launch a VoIP turret in 2001 and, according to a company spokesperson, no one else uses a VoIP solution to make live trades. But though the solution has been available for some time, it’s only recently that VoIP in the financial sector has become more widespread and heavily publicized. Merrill Lynch severed its nearly 20-year relationship with BT to jump to IPC’s VoIP system. 

"This has been the year for VoIP on the trading floor, for sure," says an IPC spokesperson. "Last year, people kept saying, ‘Oh it’s not ready, it’s not ready.’ But now we have firms coming out, going public with the fact that they’re using it. Before it was a big competitive secret." 

The spokesperson adds that ING also implemented VoIP turrets earlier this year.         

Although there has been some consternation about the reliability of VoIP in consumer sectors, VoIP as it exists in financial services is more insular—communications don’t actually go out on the Internet—and therefore it’s more secure and robust. Additionally, communications travel on a significantly larger bandwidth. 

With a VoIP system, financial institutions can back up trading floor data at any location with IP. This saves real estate costs and enhances security. Additionally, it’s easier to maintain better records and to keep trader conversations and locations up-to-date, thereby making data retrieval more efficient. 

Tony Kerrison, chief technology officer of global technology infrastructure at Merill Lynch said in a release that IPC’s solution provides "efficiency, dependability, and user-friendliness. The outstanding VoIP technology IQ/MAX delivers will provide our traders with highly advanced, reliable, and collaborative trading floor communications."  

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