Even More Trading Is Projected to Go Automated

  • JJ Hornblass
  • March 9, 2017
  • 0

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:

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.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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