Request complimentary report

Answering the demands of clients with modern technology

By Martin Nilsson
January 27, 2017
Share:

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

Systematic Internalisers: opportunities in a post-MiFID II world

Systematic Internalisers: opportunities in a post-MiFID II world

Execution In the months following the implementation of MiFID II, we have seen and will continue to see a number of Systematic Internalisers (SIs) appear on the market – some of their own volition, some following ESMA’s publication of benchmark data and thresholds. What we have seen is that many of these SIs started off by […] September 18, 2018

Why infrastructure testing is critical to your trading business

Why infrastructure testing is critical to your trading business

FIX Infrastructure End-to-end testing of trading infrastructure is critical in today’s increasingly heavily regulated environment – but compliance comes at a price. So why should financial firms pay it, and what happens if they don’t? In our second blog post on the topic, we explore the most pressing reasons to implement a robust testing mechanism. The most […] September 11, 2018

Trading infrastructure testing and why it’s important

Trading infrastructure testing and why it’s important

FIX Infrastructure As trading processes become ever more sophisticated and regulators race to catch up, the end-to-end testing of trading infrastructure is an increasingly crucial component of compliance. Financial services firms face severe penalties for trading errors – including fines, loss of reputation, potential bankruptcy and even personal repercussions for senior executives. The cost of failure is […] August 21, 2018

Multi-asset platforms well equipped for Forex trading as markets converge

Multi-asset platforms well equipped for Forex trading as markets converge

Trading Forex trading is increasingly influenced by and synchronized with equities. With this trend come new opportunities and challenges for Forex market participants. The trading styles and tools traditionally used for Forex are converging with other asset classes, enabling multi-asset and true cross-asset trading, and presenting an opportunity to consolidate and streamline trading technology. Download the […] August 7, 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 Privacy Notice.

Itiviti Talks

Get our view on global capital markets

Subscribe

Subscription successful

Thank you for subscribing!

Close window

Itiviti Talks

Get our view on global capital markets

Weekly email

    Trends in global capital markets from a technology perspective.

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