Request complimentary report

Answering the demands of clients with modern technology

By Martin Nilsson
January 27, 2017

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.

Related Content

Future proofing trade execution systems: the interviews

Future proofing trade execution systems: the interviews

Execution Participants of the GlobalTrading roundtable “Future-proofing trade execution systems” discuss their key takeaways from the event, including the challenges posed by current and future regulation, the buy vs. build dichotomy, the need to maximize the impact of technology, the challenges and opportunities posed by technology and current trends around system consolidation. Interviewees include: – James […] March 20, 2018

Future proofing trade execution systems

Future proofing trade execution systems

Execution Regulation, technological advances and behavioral changes mean that trade automation will increase, which will in turn force systems and their providers to become more agile, agree speakers at a GlobalTrading roundtable. The degree to which firms should standardize and the merits of outsourcing, however, remain controversial topics. This video and article sum up the key […] March 15, 2018

Pre- and post-MiFID II trends in the OMS space

Pre- and post-MiFID II trends in the OMS space

Execution Lars Wiberg, VP Strategic Research Trading and Trade Execution, discusses pre- and post-MiFID II trends in the OMS-EMS arena, covering a number of issues including consolidation, optimization, cost savings, workflow, globalization and outsourcing. March 7, 2018

OMS-EMS evolution: Drivers of new functionality

OMS-EMS evolution: Drivers of new functionality

Execution This is the second part in a series that explores the past, present and future of Order Management Systems (OMS) and the closely related Execution Management Systems (EMS). We cover these trading tools mainly from a sell-side perspective. As financial markets change, new demands on trading technology appear. This includes the functional requirements of the […] February 27, 2018

Request TABB Group Report: Derivatives Trading Technology: Structural Complexity Driving Next Generation Demands.

Please complete the form to download this report.

By submitting this form, you acknowledge that data collected by us will be handled in accordance with our Legal and Privacy Terms.