Trends in Trading Technology 2024

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The Convergence of High-Touch & Low-Touch Trading Strategies

This research report analyses how technological advances and market dynamics are driving a shift towards a hybrid trading environment where high-touch and low-touch trading strategies are being deployed across a unified trading environment.

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The report explains the slowing transition from high-touch to low-touch trading, underscoring the emergence of hybrid technology stacks supporting evolving digital workflows in financial institutions.
Key trends, such as the rise of software-as-a-service models and the impact of major mergers and acquisitions among platform vendors are explored, along with an examination of how regulatory changes post-2008 are reshaping the trading landscape.

Topics explored in the report include:

  • The Shift From In-house to Vendor-provided Solutions – Several factors are driving financial institutions to move away from developing in-house technology solutions towards adopting third-party vendor solutions. This shift is analysed in the context of cost pressures and the need for advanced, scalable trading systems;
  • Automation & Digitisation of Business Logic –This part of the report delves into the transition from automating low-touch execution tasks to digitising the entire trade lifecycle. It discusses how digitisation is transforming decision-making processes and improving efficiency;
  • The Growth of the Modular Buy & Build Approach – A combination of off-the-shelf functionality with customisable components typically leads to an optimisation of process automation, reducing system friction and enhancing agility in trading operations;
  • The Future of Trading Technology – The final section of the report explores the future of trading technology. It covers emerging trends such as the integration of artificial intelligence and quantum computing and their potential impact on the trading ecosystem.

In exploring those factors, this report shows that while the e-trading systems market – increasingly composed of customised third-party technology vendors – continues to be driven by the digitalisation of trading workflows in response to regulatory constraints and global competition between financial institutions, there is increasing recognition that there remains a role for the experience and market knowledge that humans can bring to market sectors and conditions that require a high-touch approach.

Published on: 27 May, 2024

Description

  • 1.0 Regulatory Change and Vendor Consolidation is Changing the Trading Landscape
    • 1.1 The Stabilisation of the Transition from High-Touch to Low-Touch
    • 1.2 High-Touch Trading Still Has a Part to Play in the Trading Ecosystem
  • 2.0 The Shift from Building Software in-house by Default
    • 2.1 From Automation of Trading to Digitisation of Business Logic
    • 2.2 Modular Buy and Build: The Best of Both Approaches
  • 3.0 The Future of Trading Technology
  • 4.0 Appendix
    • 4.1 Table of Figures

Report Data & Figures

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