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How are Tech Advancements Changing the Trading Desk?

Capital Markets CIO Outlook | Thursday, June 18, 2020

Disruptive new technologies are transforming the typical trading desk into an advanced platform with intelligent capabilities.

FREMONT, CA: Traders are now geared up for transformative times and technologies that promise unparalleled modernization. Digital solutions are enabling a host of new functionalities, ensuring that trading practices evolve continually. The trading desk especially has been at the center of several significant developments. As a result, data, risk, and relationship management in trading have seen a transformation. As modern technology advances at an accelerated pace, the trading domain remains open to innovations and optimization. Some of the ways in which tech advancements are expected to shape trading over the next few years are enlisted below.

• Intelligent Trade Execution

Traditional means of trade execution have now made way for smart trade execution with the help of Execution Management Systems (EMS). While EMS has also been a part of the trading landscape for a few years now, these digital solutions are now becoming smarter. Since traders are expected to look into all the dynamic aspects of trading in today's high-speed environments, automation becomes the key. Automation and artificial intelligence are thus going to be integral in building futuristic trading desks.

• Pre-Trade Analytics

Pre-trade analytics tools are supplying unmatched intelligence to traders who prefer testing out before the actual trade takes place. By leveraging data records, pre-trade solutions can deliver insights that take away the biases, assumptions, and vulnerabilities out of trading decisions, increasing the risk threshold, and enhancing trading outcomes.

• Increased Data Flow

The number of digital solutions that depend on data inputs has increased gradually. Be it recommendation engines or customer relationship management solutions, data has become the key. Therefore, the flow of data into trading systems is increasing continuously. With bettering accumulation and data tracking tools, identifying trends and anomalies in trade processes has also become easier.

The interaction with technology is increasing, and traders have today come to be more comfortable in dealing with AI and machine learning tools. As the trading ecosystem evolves further, the impacts of technology in shaping the trading desks of the future will become even more prominent.