From OMS to EMS and Beyond: Buy-Side Platform Consolidation

In today’s global marketplace, technology spend is shifting from the sell side to the buy side, and technology vendors are having to reassess both their client base and product suite as a result. While single-asset class execution in siloed geographies can be conducted on independent order systems (OMS) and execution management systems (EMS), the increasingly complex global search for alpha across asset classes renders traditional broker offerings suboptimal. Yet businesses are allocating fewer resources to technology budgets precisely when firms’ regulatory obligations are at an all-time high. To address the new challenges they face, buy-side firms now need to adapt increasingly homogenous products from independent vendors, often beyond existing sell-side offerings and their own internal capabilities. The increased demand for timely and accurate analytics and risk management accentuates the need for a seamless integration of data throughout the investment cycle, from the front to the back office. From pre-trade idea generation to post-execution, end-of-day compliance and final settlement, only an overhaul of technology will now suffice. The requirement for flexible multi-asset low-touch solutions delivered in a cost-efficient manner is kick-starting a revolution on the buy-side desktop.

Likewise, the regulatory intervention within the markets is yielding results. Firms seeking out requisite liquidity, conducting pre- and post-trade analysis, minimising operational risks while optimising portfolios and simultaneously meeting compliance obligations are having to radically rethink their buy-side technology and workflows. Seamless integration of the front, middle and back-office systems are no longer consider a luxury. The need to reduce complexity and costs across all internal processes is business critical in the new era of efficiency.While the debate over OMS/EMS integration is not a new one, the unique circumstances of increased multi-asset trading, burgeoning regulation and growing fiduciary responsibilities are creating a need to bring divergent yet complementary technologies together, not only revolutionising the buy-side trading desk but the entire eco-system that supports it.

In ‘From OMS to EMS and Beyond: Buy-Side Platform Consolidation, TABB Group examines the market and regulatory pressures that are framing these changes and others.