The period of extreme market volatility and elevated trading volumes associated with the H1 2020 Coronavirus crisis put the automated trading systems within CIBs under a severe and unanticipated stress test. In response to the market dislocation, different banks – and different franchises within them – responded by either expanding the role of automated trading tools in servicing client demand during the trying period, or they decreased or even suspended automated functions.
This year’s report shows how, as e-commerce transformation historically displaced voice services with electronic channels, contemporary digital transformation needs within CIBs now mandate a change from high-touch to low-touch services, including the transformation of high-touch electronic channels such as instant messaging, and in increasing automation assistance in voice trading. Meanwhile, the growth of client-facing trading services on the API / FIX channel continues, particularly for data-heavy, complex packages.
Conversely, pre-trade functionality on single-dealer platforms is shown decreasing in importance. Meanwhile, multi-dealer platforms now also drive significant electronic service provision, particularly for Tier II CIBs. These same platforms also encourage the adoption of automated trading tools, particularly auto-execution functionality, which is observed as being universal in 2020 as every responding institution has implemented the functionality in at least one client services channel.
