Part I
Implementing automation is important to the success of their trade desk say 88%
Automation offers firms better tools and workflows – and more opportunities. Most heads of trading regard implementing automation as an important success factor for their trade desk, a third (34%) critically so.
Automation can help win the war for talent
Automation brings obvious efficiencies to trading desks but ultimately people are at the heart of its value. For the vast majority of heads of trading, retaining top talent is a significant benefit of automation, with half regarding this as very important. It is harder to hang onto the best traders if they are having to spend precious time on what is essentially administrative, menial work, executing small-size orders of low value which technology could be handling instead. In addition, traders want access to the most critical tools for success so they can
stand out, shine and, most importantly, deliver value for the firm. Freeing trader bandwidth is another important benefit and is a win-win for firms and traders. Liberating traders from manual executing complex trades, providing market information to portfolio managers and developing sector expertise. Overall this change is more profitable for firms and more satisfying for traders.
Heads of trading also see automation as offering the advantages of better consistency in execution and allowing businesses to scale faster and more efficiently.
In order to implement automation, the rules have to be explicitly written out before they are programmed into the machine. It is through this process that discrepancies emerge, especially across regions, on how order execution is
being handled. In some cases, these discrepancies are valid and desirable as they might reflect the local nature of that particular market – in which case firms need to be confident that their automation technology is flexible to handle them. However, this exercise often exposes undesirable discrepancies and there is the opportunity to remedy them whilst implementing automation.
Time and money saved by automation will be used to bring competitive edge
If you saved time and money with increased automation on your desk, how would you use the money and time you saved?
We asked heads of trading to tell us in their own words how they would apply any gains from automation. Many are planning further investment in digitization and technology for competitive advantage.
AI/machine learning, intelligent algorithms, real-time analysis and interactive capabilities are examples of some of the technologies firms would like to invest any automation savings in. For some firms, this will involve continuing to pursue strategies they are already locked into.
For others, it is more a case of being open to future possibilities.
The other side of the coin is risk management and security, with some firms planning to invest automation savings in these areas.