Automation Extends Across Full Trading Lifecycle

FIX Tests IPO Automation

Refinitiv, an LSEG business, released the findings of its report titled ‘Evolution of Trading’ covering equities, fixed income, and FX trading. The report is a three-part series based on research commissioned by Refinitiv with Coalition Greenwich which surveyed market professionals, globally across the Americas, Asia Pacific and Europe and are analysed across asset classes, regions, and organisation type.

The study highlights changes taking place at the global markets level and dives into the nuanced impacts that technology and data developments can have on equity, fixed income, and FX markets.  The study found that trade execution and post trade are areas more automated for each of the asset classes. Client pricing, compliance checks and risk management are less automated.​ Multiple areas of the trading workflow are considered to require more automation, including trade execution and post trade.  Survey participants agreed that automating processes and workflow will be an activity they will be spending more time on, with equal emphasis on digital communications with customers​. Automation, alongside vendor consolidation will be the most common way firms cut costs. Limited budgets and integration issues are the main barriers to adopting new data sets, solutions, and technology.​

Key findings of the study include:

  • 31% of firms are fully migrated or actively working on moving to the cloud.
  • The trading community prefers a hybrid approach to working. This approach is anticipated throughout 2022. More in Asia expect to be in the office than other regions.​
  • The tools most valued by traders are email followed by a market data terminal and Microsoft Office.​
  • The key skills required to work on a trading desk are data analysis and market knowledge, followed by market experience and knowledge of market structure.


  • The need to automate is not confined to one or two functions, but to a series of initiatives that will span the entire FX trading lifecycle; therefore, end-to-end workflow is one of the most important selection criteria for those selecting FX trading platforms.
  • The full end-to-end workflow may be far from fully automated, which is why we see improved communication and collaboration as key elements to reducing the operational burden and the management of those as key areas of focus – 58% of FX respondents see digitally communicating with customers/partners as one of their top priorities.
  • Newer methodologies, such as atomic settlement of DLT currencies in FX, are being closely studied and implemented to improve workflow automation.


  • While automation is prevalent, the market remains bifurcated: 34% of firms automate more than 75% of their equity trading while 56% automated less than 25%.​
  • 44% of equity benchmarks are calculated in real-time, by far the predominant method.  While not all firms are doing such calculations in the cloud, the rationale for doing so is becoming stronger.​

Fixed Income

  • The next phase of market automation will expand the focus from the point of execution to the full, end-to-end workflow: 60% of surveyed fixed-income professionals said they would be spending more time “working to automate processes and workflows,” in the next 1-3 years.
  • The next wave of electronification is likely to come via less liquid instruments such as emerging market bonds and loans.​
  • There is no lack of appetite for the continued automation of the fixed-income trading workflow. Only 1 in 4 respondents point to a lack of interest from senior management as a roadblock to adopting new technology.

Dean Berry, Group Head of Trading and Banking Solutions, LSEG, said: “As client needs, market structure evolution, regulatory changes and cost pressures are all driving the market forward, our research seeks to better understand the impact of technological innovation on the capital markets in a post-pandemic world. At the same time, our data-informed insights enable us to better provide technology-driven solutions that help our customers deliver greater value to their clients.”

Kevin McPartland, Head of Market Structure and Technology Research, Coalition Greenwich, said: “Automation is no longer about only trade execution, but instead improving the full trading lifecycle.  As such, market participants are increasingly focused on pre and post trade analytics that require increasingly larger amounts of unique, high quality market data.  Those that can connect these dots will see workflow efficiency, and in turn profitability, outpace that of their peers.”

Source: LSEG

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