If it wasn’t enough that the New York Stock Exchange has been downgraded to a meeting venue today, more of trading is expected to go automated.
That is according to a new study from FIS.
Per the report released today, increased automation is expected to impact the trading businesses for 84% of respondents, sell-side executives all.
The automation of data collection, processing and reporting are likely to play critical roles in helping firms to cut their costs, comply with regulations, satisfy clients and remain competitive in the marketplace.
Among respondents, 75% expect algorithms to take an increased share of trading and transaction activities. According to the report, algorithms could help to make more sophisticated services available to new markets and to execute an increased share of investment decisions and compliance processes behind the scenes. Which is probably why 36% of respondents said they plan to increase their investment by 2020 in market expansion.
All this automation is also leading to more trading startups:
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To date, it has proven difficult for small and highly innovative startups to disrupt the sell-side broker-dealer and banker markets. However, many are busily identifying the most promising market segments and doing their best to find investment and scale up.
Insiders with market knowledge and relationships with clients are particularly well placed to become the founders of commercially viable startups, and big firms may start to co-finance startups based on the latest technologies and business models as a defensive strategy.
Although no large multinational firms yet look threatened by any new startup, incumbents would be well advised to monitor how the startups are connecting the latest technologies together in ingenious and efficient new ways, collaboratively developing and sharing complex code and finding new growth, markets and data.