Verne Global

Finance | Iceland |

26 July 2017

Iceland offers excellent connectivity to major financial hubs

Written by Dominic Ward

Dominic is Verne Global's CFO and is responsible for finance and business operations. He is also a Member of the Royal Institution of Chartered Surveyors and a board member of Data Centers Iceland.

In part three of my series on Iceland’s suitability as a strategic data center location, I look at the country’s excellent cable connectivity to Europe and North America and review some of the use cases for financial services firms.

The ability to securely and efficiently deliver data is an essential requirement of any international data center, and Iceland is outstanding in this regard. Strategically located in the North Atlantic, with a submarine cable network built on the latest technology that future-proofs both capacity and performance, and with the availability of specialist financial networks making it additionally attractive to the financial sector, Iceland offers excellent connectivity to Europe and North America.


Iceland’s submarine networks offer full network redundancy, which allows 100% uptime to be maintained. These networks have also been designed to the highest standards in security; the cable protection zone is one kilometre and the cables are continuously monitored closer to land with radar and automatic surveillance systems .

The main network connecting Iceland with Europe is the Farice network, consisting of two cables; Farice-1: a 1,205km submarine cable linking Seydisfjordur in the east of Iceland with Dunnet Bay in Scotland (11 Tb/s capacity) and Danice, linking Landeyjasandur in Iceland with Blaaberg in Denmark (34.4 Tb/s). Both cables have never had a service fault in all their 13+ years of operation (since 2004 for Farice-1).

To the west, the Greenland Connect submarine cable connects Iceland to North America via Greenland. Recent upgrades and the addition of a second backhaul provider in the US have increased the capacity to 17.2 Terabits per second, making this an attractive route for New York based quantitative buy-side firms for example, looking to use Iceland for developing and testing trading strategies


Iceland is uniquely located between, although geographically separate from, Europe and North America and offers competitive data connections to major financial hubs on both sides of the Atlantic. It is served by some of the world’s top telecom companies, including BT, Vodafone, Colt and Level 3.

Recently, Verne Global announced partnerships with both BT Radianz and Transaction Network Services (TNS), to introduce connectivity and hosting services within Iceland designed specifically for global financial markets participants to link to major global financial hubs.


The round-trip latencies between Reykjavik and international financial centres are as follows, making Iceland ideal for hosting and connecting latency-tolerant and latency-agnostic applications:

  • London: 38ms
  • Frankfurt: 36ms
  • Paris: 42ms
  • New York: 80ms

Latency agnostic applications include quantitative research and development, middle and back office applications such as clearing, settlement and payment systems across the capital markets, retail banking and asset management sectors; and analytics applications such as catastrophe and risk modelling within the insurance industry. Latency-tolerant services encompass customer-facing applications such as web and service portals, pre-trade risk analytics and post-trade risk management in capital markets; branch operations systems within retail banking; and operation and control platforms in the front and back office.

Nowadays, even within the trading arena, more and more focus is being placed on the ability to analyse large amounts of data as opposed to a pure low-latency strategy. Upcoming regulatory changes, such as the Fundamental Review of the Trading Book (FRTB), require heavy use of data and processing, and Iceland’s ability able to deliver large cost savings from its unique power pricing makes it an ideal location to host these application genres.

Iceland’s excellent connectivity makes it much more economically viable for latency tolerant applications than the continued use of traditional financial hubs like New York and London, enabling firms to save money by optimising compute and data resources.


Considering all the factors above, including the availability of the specialist financial networks alongside the cable routes, Iceland delivers the perfect connectivity profile for financial service firms looking to take advantage of the unique power and long-term cost benefits associated with its location.

In my next blog post, I’ll assess Iceland’s risk profile as a data center location


Sign up for the Verne Global newsletter

Opinion, thought leadership and news delivered directly to your inbox once a month.