This IDC Financial Insights Perspective discusses the implications of proposed submarine cable projects on the New Zealand financial markets through strategic initiatives and technology spending.
New Zealand's isolation and scale make it difficult for financial institutions to operate in international markets. IDC estimates that up to 92% of all data traffic is IP transit, travelling predominantly to the West Coast of the United States. In New Zealand, the four major banks and many larger nondeposit financial providers have offshore parents. The reliance on the Southern Cross Cable (SCC) presents a big concern: that the financial sector is becoming increasingly uneasy over. The New Zealand banking system in particular is highly reliant on the cable and the ramifications of a prolonged cable failure would significantly impact local organisations, which are linked to international markets only through this pipeline. The sector faces a number of challenges in this environment, particularly with respect to low latency and real-time capabilities, including: