Industry Trends | August 8, 2023

Level Up Front-Office UX to Achieve a Fully Interoperable and Streamlined Trading Desk

Written by Steve Grob

trading desk

This article is a guest opinion piece by Steve Grob – an industry expert and moderator at TradeTech events, who shares insights from the 2023 event and the main themes on how to innovate the trading desk. 

It was great to be back in Paris for Trade Tech this week – a great mix of old and new faces, insightful commentary, and debate. Our industry faces many challenges ahead, all stemming from a central theme: how do you increase trading velocity and find the right sort of liquidity as and when you need it? This is essential if Europe is going to become a more attractive destination for capital which was, incidentally, one of the primary policy objectives that initiated a significant portion of the MiFID regulations over 15 years ago. Fast forward to today and the post-pandemic era, the war in Ukraine and unprecedented interest rates hikes all combine to make alpha generation and trading even more of a challenge. 

Trading Desk Technology Theme 

This narrative fed many of the panel sessions that looked at how technology and market infrastructure need to develop. For instance, the shift to T+1 settlement has the potential to stretch traditional post-trade technology to breaking point. This will require innovative thinking to glue together systems and data in a far more intelligent way. This is because achieving high enough levels of STP in much shorter time scales is a problem that stretches right across front, middle and back office. The multitude of different systems involved will need to be enhanced to offer a significantly more seamless experience. Thankfully, the next generation of desktop interop technology is on hand to help solve this problem. We look forward to working with our ecosystem of vendors and ISV on this over the next couple of years.

Collaboration Theme 

Another theme that stood out was the increasing number of individual vendors who are embracing a far more collaborative, partner-based approach to working with each other. Perhaps counterintuitively, by working with other vendors, workflow providers can create better experiences for their customers. Thus, this approach enables point solutions to be embedded more elegantly into the trader’s daily workflow. Again, desktop interop can turn this from anaemic press releases into hard-nosed practical reality. This is why many buy sides and sell sides see desktop interop as an essential part of their broader digitalization programs. One leading asset manager said that the ability of a new potential tech supplier to offer genuine integration solutions is becoming a major buying consideration. Tech firms will need to offer more than ‘well we’ve got an API’ if they are to compete successfully in the future. 

Business Agility Theme  

A final theme that emerged from the event was the role of technology in increasing overall business agility. Our industry is highly competitive and driven by shrinking margins. It is also highly dynamic, with new business opportunities in terms of asset classes, trading styles and destinations constantly emerging. Technology needs to empower participants to jump on these new opportunities quickly and with minimum outlay. Then, if an initiative proves to be successful, it can be quickly scaled up and if not – simply shut down. 

Panel Summary: How to level up your front-office experience and strike the balance between buy & build to achieve a fully interoperable and streamlined trading desk 

In addition to the overarching event themes, I would like to focus in more detail on one of the panels I moderated – ‘How can you level-up your front-office experience and strike the right balance between buy and build to achieve a fully interoperable, re-active and streamlined desk?’. 

The industry leaders I had on it were Ross Carmichael (CTO, Liontrust Asset Management), Roger Chandler (Director of Partner Management,, Ian Mawdsley (Chief Product Officer, Broadridge Financial Solutions), John Camuso, (Director Client Service, SS&C Ez) and Chris Hollands (Head of EMEA Sales, Trading, TS Imagine). 

Trading Desk Challenges 

The discussion started by outlining the main challenges experienced by the front office such as the lack of compatibility, data overload and the challenges of moving orders around different systems without a proper systems integration strategy. The latter challenge was addressed by interoperability vendor in the light of the buy vs build debate whereby a mix between the two approaches makes sense. Organizations with large development teams can dedicate the resources to build a desktop integration platform internally but those that need it quickly and without a development powerhouse internally, need to select the right interoperability partner. 

Vendor Collaboration 

Building on this theme, Ian Mawdsley elaborated on the strategic importance of the deal between Broadridge BTCS and and how desktop interop has become a big part of getting better user journeys. 

The narrative flowed into developing the collaboration between vendors and clients, stressing the importance of ISVs educating clients on customization vs out-of-the-box solutions. Today, each partnership needs to have a larger vision with business agility at scale in mind, not only a focus on features. As the panelists agreed, this logic applies to partnerships between vendors as well. Due to the rising importance of digitalization within the buy side, FinTech vendors have developed a more open approach and willingness to collaborate on integrated solutions that will make implementation easier on the client side. 

Benefits of Streamlining the Front Office 

Wrapping up the discussion, the speakers outlined the main benefits of streamlining the front-office experience as it allows for: 

  • traders to strip out the noise of smaller, easy-to-execute trades and focus on the bigger ones in illiquid names, bigger blocks, etc. 
  • more time for execution performance analysis in trade and post-trade (TCA) 
  • more time/emphasis on the trader to engage with the portfolio manager to create better and more informed trading decisions and order execution choices. 

In a nutshell, the overarching spirit of collaboration and desire for innovation at TradeTech Paris 2023 was inspiring and encouraging. This is the way for technology to truly empower the trading community. 

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