US Institutional Equity Trading 2014: Bellwethers of the Buy Side

The pace of change within the buy side trading desk is accelerating. Technology, analytics and process are all undergoing changes to adapt to competitive and structural changes. This is an industry known for being more conservative in its embrace of change. Electronic trading may have begun in the late 1990s with some early adopters, but it wasn’t until 2006 that the laggards of the industry finally capitulated, a full seven years later.

Nowadays, the adoption cycle has shortened significantly. Across 108 interviews with US-based asset managers, TABB Group has identified industry leaders who are using new technologies, analytics and trading processes, to give their firms more of an edge. But there is a middle majority of firms who recognize the threats of being behind and are actively engaged in bringing similar capabilities to their firm.

Technology is not only bringing more efficiency through automation but is also seen as a place for cost savings. Firms are looking to consolidate the number of order and trading management systems within their organization, particularly for more standardized and liquid instruments. The leading technology initiatives among asset managers offer a clear view of the various issues the industry is facing and how a cutting edge firm approaches a problem, while a firm with limited means can achieve a close approximation.