Evolution of the intelligent flow monster in trading
Steve Grob, director of group strategy at Fidessa, explains how playing the scale game successfully within the trading environment will increasingly depend on a changing and more intelligent relationship with technology. May 02, 2013 | Steve GrobThe growth in market complexity, combined with decreasing trading volumes and an unrelenting churn in global regulation, has had a fundamental effect on traditional sell-side business models. Downward pressures on revenues are accompanied by the soaring costs of servicing client demand. Simply intermediating between clients and sources of liquidity is no longer a guarantee of success. Just staying in the game requires ever greater investment in technology. But the growth in infrastructure has to be efficient so that revenue increases at a faster rate than the simultaneous rise in costs. This is challenge enough for any firm: but for scale players, with multiple lines of business to support, it is replicated many times over. One response has been to consolidate technology provision, so that discrete operational silos are collapsed into horizontal layers that support order management, connectivity or risk management. A single platform that can provide both depth of capabilities – managing workflow throughout the front, middle and back office – as well as breadth across an increasingly diverse array of asset classes, reduces the risk of inefficient technology growth. But the new climate means that firms must go further still and challenge the traditional idea that all technology investment is a source of value. In fact, serious questions are now being asked as to the viability of this approach in today's market conditions. The role of trading technology is primarily to enable brokers to develop, protect and deliver their IP – the unique features that create true competitive advantage – whether that is highly engineered algos, complex basket trading capabilities, the quality of a firm’s people and relationships, or its international reach and capital base. However, not all technology contributes directly to creating and delivering IP to market. A substantial proportion of technology deployed by sell-sides around the world is l... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Innovation, Markets & Exchanges, Technology & Operations, Trading & DataInnovation,Markets Exchanges,technology,Trading & Data, Innovation,Markets & Exchanges,Technology & Operations,Trading & Data, Keywords:Fidessa, Steve Grob, Dodd-Frank Act, Swap Execution Facilities, MiFID II, HFT Fidessa, Steve Grob, Dodd-Frank Act, Swap Execution Facilities, MiFID II, HFT
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