Trading technology and automation is augmenting the buy-side trader’s responsibilities with more output per head on the desk. It is now a cliché to say that each trader should focus their time where it is most needed and technology will make this possible.
The buy side’s use of FX trading algorithms is on the rise and K&KGC is assisting both existing and new users with benchmark guidance on which technologies the buy side are using. With the increasing focus on FX trading, the buy side indicate a strong interest in new trading technologies to streamline their workflow. It is no longer a question about ‘if’ but only ‘when’ new technologies will emerge on the buy-side’s FX trading desks.
Jean-Philippe Male (BidFX), Martin Knudsen (Bloomberg) and Kristian Karppi (K&KGC) at the 7th annual ATF Global Summit 2019
While the buy side had an opportunity to articulate many of the technology challenges at the 7th annual Alpha Trader Forum (ATF) Global Summit, K&KGC also received buy-side feedback that the discussions with the selected technology sponsors, later in the day, unveiled new solutions of which they were previously unaware. While some well-funded desks have taken the initiative to build their own execution management systems, third party technologies are slowly catching up with more complex buy-side needs. The buy side are already adopting various solutions to start automating bond trading. The buy side want to continue to be in control to prevent signalling issues therefore, only a small share of trading are expected to go to zero-touch. Conditional rule-based automation tools are already available but better access to holistic market data and firm prices would be needed for true smart order routing. The buy side are increasingly engaging with non-traditional liquidity providers for smaller trades.
Ivan Mihov (AxeTrading) and Ravi Sawhney (Bloomberg) at the 7th annual ATF Global Summit 2019
The buy side are now looking at end-to-end workflow solutions, interconnectivity and overcoming legacy technology issues. On the trading side, next generation trading algorithms leveraging machine learning, neural networks and artificial intelligence is already available. Beside the technology buzz words, the sell side are now competing on every level with a more efficient organisation, smarter processes and optional cohesive partnerships. The electronic liquidity providers (ELPs) are increasingly starting to play an important role on the other side of the trade.
Natan Tiefenbrun (BoAML), Matthew Cousens (Barclays), James Hilton (Credit Suisse), Duncan Higgins (ITG) and Benjamin Springett (Jefferies) at the 7th annual ATF Global Summit 2019