Download the white paper

The integration of high and low touch capabilities in automated trading

By Richard Bentley, Chief Product Officer, Itiviti
December 10, 2018
Share:

Change is nothing new in trading. Since the millennium, sell-side brokers have had to ride waves of transformation in regulation, market structure, technology and economic fundamentals. Survival and success have depended on adaptability and timely adjustment to these increasingly complex market circumstances in terms of organization, business models and technology.

The financial crisis of 2008 served to further exacerbate the situation, bringing about strong pressure to slash budgets and headcounts, which in turn strengthened the impetus to move towards automated, electronic trade execution. More specifically, this has meant an  increased focus on ‘flow products’ like exchange-traded cash equities and derivatives, and the provision of direct market access (DMA) and direct strategy access (DSA) – algorithmic trading – to cut costs. The  rise of ‘Low touch’ trading desks offering DMA/DSA have consequently emerged like start-ups inside institutions and have gradually captured the lion’s share of order flow and market growth, alongside the more traditional ‘High touch’ desks.

In terms of technology, this prompted Tier 1 institutions built their own automated systems for low touch trading, including connectivity and order management, while Tier 2 firms were forced
to bend existing high touch Order Management Systems (OMSs) for low touch flow in an effort to meet demands while constraining costs. But given the very different nature of high touch and low touch trading, neither approach is fit for purpose in a world where the electronification of asset classes and volume is only picking up pace.

This white paper takes an in-depth look at the evolution of low touch trading and its implications for order management technology, exploring the need for fit-for-purpose solutions that provide clients with the quality service that they demand – now and in the future.

Related Content

Benefitting from convergence in FX and equities

Benefitting from convergence in FX and equities

Trading As discussed in an earlier blog post, convergence of equities and FX markets is spurring some institutions to merge their respective trading operations so as to enjoy economies and leverage successful activities across both asset classes. But for firms taking this route, there are significant challenges. Despite the convergence of FX and equities markets, there […] January 14, 2019

MiFID II: turning challenges into opportunities

MiFID II: turning challenges into opportunities

Risk & Compliance MiFID II posed a significant number of challenges for trading firms across Europe, but its regulatory impact has perhaps not been as dramatic as many had anticipated. Although many analysts predicted the imminent failure of smaller market players and potentially serious consequences for firms undertaking systematic internalization, the regulation came into play without creating quite […] January 7, 2019

MiFID II: identifying SI opportunities

MiFID II: identifying SI opportunities

Trading On December 5th 2018, Itiviti’s Systematic Internaliser solution was named Best New Technology Product – Trading and Execution at 2018 FOW International Awards. In this article, Itiviti’s Jonas Lindqvist explains how Itiviti was already working with clients to identify the opportunities offered by the SI regime on MiFID II’s January 3rd go-live date. In the […] December 17, 2018

Trading system testing: a practitioner checklist

Trading system testing: a practitioner checklist

FIX Infrastructure End-to-end testing of trading environments is essential for financial services firms today – yet it can seem daunting to implement these complex systems, especially if it involves an overarching overhaul of existing point or legacy solutions. Taking a step-by-step approach can break this down into a more manageable process, while the resulting benefits have the […] December 3, 2018

Request Itiviti Low Touch white paper

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.