Capital-Market Network Spending Increases01.23.2015
Financial firms are increasing their investment in technology across the board, including improved and expanded networking capabilities to ensure much-needed access to emerging liquidity pools and new sources of market data.
Traders and IT decision makers are increasing their reliance on cloud computing and managed services in order to streamline their processes and improve their bottom line, according to the IPC 2015 Capital Markets Technology Trends Survey.
The survey, which was conducted at the Futures Industry Association’s FIA Chicago conference in November, included a broad mix of market participants including buy- and sell-side institutions, exchanges, and trade lifecycle service providers.
Nearly half (46%) of participants said their primary driver for technology investments were improve efficiency and cost effectiveness. Nearly two-third (64%) are implementing or plan to implement cloud computing technology in the coming year, and 63% are currently using or have plans to use managed services to support their technology infrastructure.
“There’s going to be investments in network infrastructure, there’s going to be investments in managed services, as well as in improving trader productivity and efficiency,” said Ganesh Iyer, director of product marketing for the financial markets network at IPC, a provider of network services and trading communication technology. “Those were definitely three areas cited by the respondents.”
Investments in technology aimed at supporting and assisting the trader, trading desk or trading floor were indicated by nearly a third (31%) of respondents. In fact, electronic trading technology as an investment focus grew from 21% in 2014 to 30% in 2015.
As firms continue to explore the potential of ‘utility-style’ technology services, managed services are expected to play a larger role in the infrastructure of financial institutions. Cloud computing has made inroads into the financial services industry as firms recognize they can improve performance in key operational and technology areas by using the cloud.
“What we’re seeing is more and more firms need services on-demand and technology on-demand, and they’re more open to using cloud services in general,” said Iyer. “Sometimes it’s not predictable what level of resources that they would need for their initiatives, and with a cloud-based solution, you can adjust up and down, based on demand, instead of having that fixed infrastructure cost.”
IPC is extending its customer base beyond sell-side trading desks, which use its trading turrets, into the buy side community. “A lot of broker-dealers and inter-dealer brokers know about IPC, but asset managers and institutional investors are not as aware of all the services that we offer, so we’ve been working on raising our awareness within that community.”
Institutions can manage their bitcoin exposures in existing portfolio management and trading workflows.
ETC said bringing BTCE to Cboe Europe is a logical step as demand for crypto recovers.
Former buy-side trader Tim Olsen now does real estate in Big Sky Country.
DPD provides pensions schemes with the potential for yield premium and strong income stream.
Pando Asset is the fifth new crypto ETP issuer to join SIX Swiss Exchange this year.