Demand for integrated trading systems is not keeping pace with with the spread of cross-asset class trading, according to a report by Greenwich Associates.
About two-thirds of equity, fixed-income and foreign-exchange traders operate in multiple asset classes, Greenwich said. The most diverse are equity traders, with 72% trading more than one asset class. Despite this -- and after two decades of investment in integrated trading platforms by systems providers -- institutional trading desks are more interested in cross-product coverage than cross-asset technology platforms.
These are among the key results of a Greenwich Associates study of 358 buy-side traders, titled "Cross-Product Capabilities Hold Key for Trading-Systems Providers."
The report shows that cross-asset class trading is on the rise and suggests there is a lack of demand for integrated, cross-asset class trading platforms as a widespread solution for institutional trading desks.
Investors are looking for providers to forge a strong relationship and be experts in the unique asset classes and products they trade. However, specialist systems appear to be more appealing than all-in-one solutions for many buy-side traders.
Between August and September 2014, Greenwich Associates interviewed buy-side traders across the globe working on equity, fixed-income or foreign exchange trading desks to learn about trading desk budget allocations, trader staffing levels, OMS/EMS/TCA platform usage, and ATS satisfaction levels.
The report concludes that the inherent complexities of adequately servicing multiple, unique asset classes and products make developing a single system across asset classes a logistical hazard. “It’s simply a case of following the money,” said Greenwich Associates analyst Kevin Kozlowski. “Rather than continuing to focus resource spend on the best multi-asset platforms, trading-system providers should focus on building solutions to trade a suite of products within an asset class.”
Featured image via mickyso/Dollar Photo Club
