Given the market’s changing dynamics – heightened regulatory scrutiny, advancing technologies and an ever more complex marketplace – what do trading firms consider to be the most important attributes when considering solutions for their next-generation trading technology stacks?
A recent TABB Group survey of 72 buy-side, sell-side and proprietary trading firms that are active in the global derivatives markets asked what factors were important to technology buyers. But before we consider the answers, it’s worth noting that without flexibility and agility to respond to client’s needs any supplier’s solution is effectively a non-starter.
Traders are constantly looking to be the first to discover and deliver on new business opportunities. For success in these endeavours, they need access to new markets, new products and new trading platform functionality. They need to deal with the latest edicts from their regulator, make use of new functionality on the fly and respond in real time to client requests. They want first-mover advantage.
Historically, trading firms have built their own platforms to ensure they exploited this first-mover advantage. But with internal IT staffs under pressure, firms are increasingly taking a best-in-class approach, farming out part or all of their trading technology needs to trusted suppliers who enable them to quickly respond to changing functional needs. They need to be able to plug these vendor solutions into their existing infrastructures, quickly and with little fuss. And only the most flexible and agile suppliers will be considered.
Assuming your supplier makes this flexibility grade, what are the key attributes the marketplace considers when looking at third-party technology providers that can help them create a successful trading platform?
According to the TABB survey, client support reigns supreme. Customer support was identified by 50% of survey respondents as the No. 1 consideration when looking at third-party trading technology. But respondents wanted more than just someone to call in a technology crisis. They wanted to be fully apprised on how to navigate ongoing changes to the trading platform. They wanted their trading desks educated on how to use a new module to access a new execution venue or trade a new product.
This need for constant client interaction was far ahead of the pack when it came to customer needs. Next came Connectivity (with 38%), Compatibility with other systems (37%), Ease of implementation (37%), High availability (34%), Breadth of product suite (33%) and Technology advancement (32%). Closing out the field, perhaps surprisingly were Data security (with 19%) and Financial strength of the vendor (12%).
The survey result suggests that it’s not enough for the trading platform simply to be functionally and technologically advanced. To succeed, trading firms need ongoing support. They want help with implementation and cost management, and with the never-ending checklist of regulatory items, like rule interpretation, rule translation, programming and reporting. Partnering with a supplier that can bear some of this load can help firms focus on business priorities rather than dealing with compliance and regulatory minutia that can distract from their core activities.
Trading In recent years, exchange-traded funds (ETFs) have seen phenomenal activity and growth. Regulation, product innovation and investor appetite have driven global Assets under management (AUM) to record levels, while also fueling increasing market structure complexity and straining trading platform capabilities across the board. Itiviti, in conjunction with GreySpark Partners, recently engaged in a comprehensive review […] May 18, 2017
Trading Videos from the ETF panel held at FOW Trading Amsterdam 2017. ETFs are big business in the US but elsewhere take-up has been slower. This is now changing as investors seek to gain lower cost exposure to global trends. Regional competition is hotting up as exchanges vie to build regional hubs for ETF trading. But […] May 16, 2017
Trading Chris Anderson, Senior Product Manager at Itiviti, talks to FOW Amsterdam about current trends in the ETF space, the potential for future growth and Itiviti’s commitment to providing solutions to the biggest challenges seen in the market. Download the full white paper May 11, 2017
Trading As continued strong growth is predicted for Exchange-traded funds (ETFs), the marketplace is also becoming increasingly complex. Itiviti has thus engaged with GreySpark Partners in a comprehensive review to map the key factors that will shape the future of ETF trading. The resulting whitepaper covers the competitive and regulatory issues facing ETF market participants in […] May 8, 2017
By submitting this form, you acknowledge that data collected by us will be handled in accordance with our Legal and Privacy Terms.