Buy-Side Fixed Income Trading Technology Q&A: Wellington
Wellington Management won Best Buy-Side Fixed Income Trading Technology at the 2018 Markets Choice Awards. Markets Media followed up to learn more — Carrie Chan, Vice-President Fixed Income Trading Technology, and Erik Tumasz, Managing Director Fixed Income Trading Technology, responded to questions via e-mail.
Please describe Wellington’s fixed income trading technology — what are the primary capabilities?
Our tools are designed with the aim of supporting the full fixed income trading lifecycle including: pre-trade decision making, trading execution efficiency, and post-trade processes and evaluation. Our traders use one system globally for all their trading and order management needs across all fixed income desks and products.
Who is responsible for driving technology direction?
At Wellington, trading technology direction is the product of a close collaboration between trading technology and the traders. We make most decisions together from overall trading technology strategies to hiring talent on both teams.
How does the trading technology ultimately benefit end-user investors?
We design technology seeking to meet the needs of our clients and traders. In this case, we decided that the best way to do this was to build a proprietary fixed income trading technology solution. We believe that combining our traders’ market expertise and strong sell-side and vendor relationships with our in-house trading technology helps us to serve our clients better.
What are recently completed and/or ongoing initiatives?
Last year we focused on aggregating different pre-trade data to provide our traders with deeper transparency on the fixed income markets and on improving post-trade cost analysis. This year we are working on combining pre-trade and post-trade data to help our trading team gather more insight through data science with a goal of improving execution.
What do you see as the future of institutional fixed income trading technology?
Looking ahead, we see three major technology trends: greater automation, more transparency in pricing and data dissemination, and the blending of art and science through the use of technology. For example, we believe we will see benefits from automation in areas like intelligent low-touch trading across asset classes and the ability to build better controls for pricing tolerance and booking errors.
MTS assesses the roles of connectivity and liquidity in automation.
Technology of the front office and the middle office is converging.
Traders borrow from the scientific method to determine what works and what doesn’t.
On the sell side, ‘Execution as a Service’ is in, off-the-rack algos are out.
Technology is a value-add, rather than a job-subtract, for humans.