Is Trading Automation a Must for Capital Markets?

Is Trading Automation a Must for Capital Markets?

Capital Markets CIO Outlook | Friday, August 21, 2020

The dynamics of capital market trading are subject to disruption, thanks to the growing impacts of automation.

FREMONT, CA: Automation offers excellent opportunities for reorienting stock trading practices. Given that machines are becoming more and more intelligent every passing day, trading companies can automate numerous tasks and concede more responsibilities to computers. The current regulatory regime can also be managed better with automated solutions. Capital market companies are already preparing for automated trading, and in the next couple of years, the trend of automation could become ubiquitous in the trading sector. 

Intelligent operating systems and applications are scoring over human skills when it comes to processing vast amounts of market data

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 in real-time. Although the intelligence of analysts could be at par with AI-backed systems, digital analytics solutions make analyses faster and, thus, more effective. Making trading decisions and executing orders are now subject to the discretion of self-driven machines that are redefining investment strategies.

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Among the factors that trading automation impacts, price, speed, and volume are the major ones. Adopting automation in trading allows capital market companies to process financial data and evaluate stock patterns, as well as market sentiment seamlessly. By comparing the significant market variables, automated trading solutions equip stock trading to attain higher levels of profitability. Today's technology is empowered enough to understand nuanced factors like inflation too. Such capabilities of identification have made automation exceedingly valuable to capital market firms that bank on studying patterns to arrive at business decisions.

The trading ecosystems are now oriented towards new business models. The convergence of AI, big data, and NLP has prepared the groundwork for the successful adoption and deployment of automation-backed trading solutions. Utilizing the data points, automation delivers accurate predictions and pricing. Overall, capital markets can enjoy reduced volatility. As trading entities get to react faster to insightful pointers, risks will also fall. In the era of global, volatile markets, automation can help capital market companies deal better and safer.  

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