12.13.2012

Investment in Desktop Trading Apps Tops Firms’ Spending Priorities

12.13.2012
Terry Flanagan

Improving the trading desk and trading floor led the list of 2013 spending priorities by firms responding to a survey conducted by IPC Systems, which was cited by 30% of respondents, followed by infrastructure/network services (18%), trading support (16%), and back office (14%).

High-frequency trading (12%), electronic trading (12%) and algorithmic treading (11%) were also mentioned as priorities.

The survey polled more than 100 executives at trading firms with nearly a quarter consisting of C-level respondents, and 87% having approval or influence on technology spending decisions.

Some 45% of respondents view desktop trading applications as an area of investment in 2013.

“Such a significant level of investment in desktop trading applications strongly suggests that the needs of traders continue to evolve and that their applications are evolving with them,” said Ganesh Iyer, senior manager for product marketing at IPC Systems, a trading technology firm. “New needs are becoming apparent, due to both regulations and changing market conditions.”

Since every trading firm is different, investment in apps makes it possible to increase productivity and collaboration by customizing desktops to the specific challenges facing traders, Iyer said. “The end result gives traders new ways to increase their productivity, increase profits and meet regulatory requirements,” he said.

New regulations, increased oversight and the greater complexity of trades are making it more critical for traders and off-floor staff to collaborate, as evidenced by the 28% of respondents citing collaboration as a priority.

“It’s likely that the existing processes could slow down their collaboration, and, by extension, deal making,” said Iyer. “Apps that simplify and accelerate collaboration between traders and their middle and back office trade support teams will result in deals that get done faster, competitive advantages maintained thanks to teams working more closely together than ever before, and reduced costs.”

This demand is being fulfilled by trading technology providers. Paladyne Systems, for example, is offering its order management system (OMS) for hedge funds, asset managers and prime brokers as a standalone product.

Previously bundled as part of Paladyne Portfolio Master, it is now offered as a full OMS tightly integrated with Advent’s Geneva portfolio accounting system. Paladyne OMS also integrates with service providers such as fund administrators to handle the fund manager’s start-of-day position feeds and middle-office processing.

“We have actively been providing OMS capabilities to several hundred clients for many years, but have never marketed our product set as a standalone OMS product,” said Sameer Shalaby, president of Paladyne Systems, in a statement. “We believe that our functionality and pricing model provides a logical upgrade path for funds and asset managers as their needs expand.”

Nearly a third of firms responding to the IPC survey say they will make investments to make traders more mobile.

“As the markets change in the blink of the eye, let alone over the course of the day, increased mobility is becoming essential,” said Iyer at IPC Systems. “Mobile technology will allow traders to be more efficient by reducing much of the impact of unexpected events, enabling collaboration between teams from anywhere.”

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