In the current low yielding environment, it is tempting for buyside firms to focus on trading systems and investment strategies to sharpen their competitive edge. However, it is important not to neglect the plumbing at the back end. This is especially the case with connectivity which over the years has been a focus for investment, but still requires fine tuning.
Although there will be differences in the way institutions implement and deploy systems to create greater efficiencies across asset classes and trade lifecycle workflows, many face similar challenges of building an efficient stack across the trading architecture. These include a fragmented infrastructure built on the back of acquisitions and geographical expansion as well as the expense of lowering latency. The incremental reduction in latency is so small and costly to achieve that businesses across the size spectrum need to re-examine their model.
Even when looking at crypto-currency platforms there are different levels of execution latency. Depending on the platform it can either take minutes or seconds to conclude a transaction.
Not surprisingly, the first step firms need to undertake is to determine their requirements and research the relevant providers that will best fit their needs. There is a wide variety of options on offer in the market and the aim of the guide is to explore the various solutions from every angle. It is also to see how they have evolved through the years.
Lynn Strongin Dodds, Managing Editor