The trading technology landscape is heading into 2025 with unprecedented momentum, driven by a convergence of regulatory changes, market structure reforms, and advances in core infrastructure technologies. While artificial intelligence dominates much of the conversation around fintech, the year ahead will also be shaped by broader, practical shifts—from faster settlement cycles and rising data costs to the harmonisation of digital asset regulations and US market structure reforms. These developments might be less flashy than AI, but they are no less critical to the evolution of trading operations.
Drawing on insights from leading trading technologists, TradingTech Insight outlines six key trends that will shape the foundations of trading technology in 2025 – offering a more balanced view of what the industry should be watching beyond the AI hype.
1. Changing Regulatory Frameworks Around Digital Assets
A key theme for 2025 will be the push toward regulatory clarity in digital assets, though approaches are likely to diverge across major jurisdictions. In the EU, the Markets in Crypto-Assets (MiCA) framework is set to introduce a harmonised regulatory regime, aiming to reduce fragmentation and improve compliance efficiency for firms operating across borders. However, in the US, the incoming Trump administration is expected to take a lighter-touch approach, prioritising market innovation over regulatory oversight. This divergence could create regulatory arbitrage opportunities for firms but also increase complexity for those trading across multiple regions.
Achieving global coordination will be challenging in this environment, but institutions trading digital assets will need to prepare for both stricter and looser regulatory frameworks depending on where they operate. For trading technology providers, this means building flexible compliance solutions that can adapt to different jurisdictional requirements, ensuring firms can navigate fragmented regulatory landscapes while integrating digital assets into mainstream trading workflows.
“Regulation is set to be a key theme for 2025, as more and more market participants look to enter the digital assets space,” predicts Solene Khy, Product Manager, FX, Equities, Commodities & Digital Assets at Murex, the capital markets technology provider. “While still a fairly nascent market, multiple jurisdictions are looking to step up and implement new regulatory frameworks to bolster transparency and security. Under MiCA, firms operating in Europe must now consider this for both the issuance of crypto-assets and the provision of related services. But with more regulation comes more scrutiny. The role of real-time analytics and data for ensuring compliance should not be underplayed, as digital assets are much more complex in how they operate compared to traditional asset classes. By pairing trading and risk management platforms with quality market data, financial institutions will put themselves in a much better position for 2025. Further, firms can expect to see significant improvements when it comes to optimising their investment strategies as well. As the landscape continues to evolve, it’s not just about staying ahead of the curve, but about navigating it safely and strategically.”
2025 is also likely to see more formal oversight of DeFi platforms, particularly around KYC and AML measures. While this will pose challenges for platforms built on anonymity and decentralisation, it could also legitimise DeFi in the eyes of institutional investors. For trading technology firms, this will mean building compliance tools that integrate with DeFi protocols, offering solutions that allow firms to safely engage with decentralised platforms without falling foul of evolving regulations.
“With the opportunities unlocked by Gen-AI, Bitcoin trading north of $100k and DeFi gaining ever more traction, the need for market players to have RegTech solutions which can evolve at the same pace is becoming increasingly apparent,” observes Craig Butterworth, Chief Commercial Officer at Droit, specialists in automated intelligent decision-making and computational law. “Firms will need to ensure their regulatory decision engine is capable of rapidly scaling to support new regulatory and client requirements, whilst not slowing down workflow or compromising on auditability and transparency. Think of it like a racing car, if you tune the engine to make it more powerful, you need to also invest in better brakes and tires to harness that potential and keep you from crashing.”
2. Potential Changes to US Equities Market Structure
The structure of the US equities market is poised for potential reforms in 2025, with one particularly significant shift being the ongoing move to reduce tick sizes, aimed at improving market efficiency and reducing trading costs. The SEC has proposed a more granular tick size regime, replacing the current one-size-fits-all approach with variable tick sizes based on a stock’s liquidity and trading activity. Reducing tick sizes is expected to lower execution costs for investors—particularly in highly liquid stocks—while also increasing order competition. However, some market participants worry that smaller tick sizes could lead to higher message traffic and increased market fragmentation, putting further pressure on trading infrastructure. For trading technology providers, this change highlights the need to develop more sophisticated order and execution management systems capable of handling a greater volume of price points and optimising execution across venues in real time.
“With a Trump presidency, it is fair to say that a lot of financial regulatory changes are completely up in the air,” notes Sylvain Thieullent, CEO of Horizon Trading Solutions, the electronic trading and algorithmic technology provider. “Right now though, the SEC has ratified changes to equity market structure including a move to reduce the tick sizes of trades. Smaller tick sizes would cause tighter spreads, which could have a knock-on impact on high frequency traders’ willingness to market-make US stocks while channelling large volumes of trading to technology firms like Robinhood. This presents an opportunity for traditional retail brokers to win back the business that they have lost over the last decade, if they are in a position to take advantage. They need to differentiate themselves and adapt to modern trading conditions. This means embracing technology, updating their internal operational processes, and ultimately creating the quality of experience that customers expect in 2025.”
3. Preparation for Shift Toward T+1 Settlement in UK/EU
The shift toward T+1 settlement in the UK and EU, expected to be complete by 2027, will require significant operational changes. Moving from T+2 to T+1 settlement is expected to reduce risk by shortening the time between trade execution and final settlement, but it also increases pressure on post-trade processes. Firms will need to ensure trade matching, allocation, and reconciliation happen on a near real-time basis, requiring investments in automation and straight-through processing (STP). This will place particular demands on buy-side firms, custodians, and clearinghouses, who must adapt legacy systems to handle faster settlement cycles without introducing errors or delays.
One of the biggest challenges will be cross-border settlement, where discrepancies between jurisdictions could create bottlenecks under a compressed timeline. Firms that trade across regions will need to manage data standardisation, operational alignment, and collateral mobility more efficiently. As a result, the shift to T+1 is likely to drive greater reliance on predictive analytics to anticipate settlement risks and real-time exception management tools to prevent failures. Trading technology providers will play a crucial role in helping firms navigate this transition, offering workflow solutions that automate post-trade processes and integrate seamlessly with both legacy and emerging infrastructure.
“2025 will need to be a year of action from financial institutions looking to prepare themselves for the monumental shift to T+1 settlement in the EU, UK, and Switzerland,” states Daniel Carpenter, CEO of Meritsoft, a Cognizant company. “We’ve learned over the years, with CSDR in the EU and T+1 in the US, that the implementation of tactical workarounds to manage settlement operations leads to higher costs and inefficiencies over the long term. For example, with CSDR in the EU, we’ve observed that some banks are willing to treat tens of millions of euros in penalties on failed trades as a cost of doing business rather than invest in systems to better manage their settlement fails. This is not sustainable. Market participants in Europe should be starting now to proactively put in place solutions that enable them to not only better handle the operational activity for failed trades but reduce the total volume of fails. We believe market participants should implement a more strategic approach to trade settlement operations, leveraging AI capabilities to both identify at risk of failing trades in near real-time, as well as propose resolutions automatically.”
4. Trading Venue Innovation
The pace of innovation in trading venues is accelerating as market operators seek to differentiate themselves in a competitive landscape. One interesting trend is the development of hybrid trading models, blending traditional centralised liquidity pools with decentralised elements. These models aim to offer the best of both worlds: the security, transparency, and regulatory compliance of established venues alongside the flexibility, efficiency, and direct access enabled by DeFi technologies. As venues explore ways to incorporate blockchain and tokenised assets, trading infrastructure will need to evolve to support multi-asset workflows that seamlessly integrate traditional securities with digital instruments.
“In 2025, the challenge for European primary markets will be creating an investment environment that fosters innovation while attracting global IPOs, not just competing for regional dominance,” observes Bjorn Sibbern, Global Head of Exchanges at SIX, the Swiss financial data and market infrastructure provider. “On the secondary markets front, liquidity fragmentation remains a pressing issue. By the end of next year, exchanges will need to have made significant strides in venue innovation, not only to retain institutional flow but also to foster greater retail participation. Short and sharp bouts of market volatility, as we saw this year with the global equity sell-off in August, could also shape the trading landscape. This is why exchanges must evolve with smarter tools and deeper liquidity to remain the trusted platforms for price discovery.”
Another significant area of innovation is in enhanced interoperability between trading venues and third-party platforms. As liquidity becomes increasingly fragmented across different markets and asset classes, trading venues are focusing on building API-first infrastructures that allow clients to connect their execution tools, data feeds, and risk management systems more easily. This push for interoperability aims to streamline workflows for market participants, reduce operational silos, and improve execution quality across a fragmented landscape. For trading technology providers, this trend will create opportunities to offer modular, customisable solutions that allow users to efficiently access multiple venues while managing regulatory and operational complexities.
5. Greater Use of Open-Source Technology
The use of open-source technology in financial markets continues to gain momentum, driven by cost efficiency, flexibility, and collaboration opportunities. Trading firms are increasingly turning to open-source frameworks to build customised solutions without the high upfront costs associated with proprietary software. This shift enables smaller firms to innovate at pace with larger players while allowing established firms to reduce development cycles and focus on differentiating their trading strategies rather than reinventing core infrastructure. However, as reliance on open-source grows, firms must also strengthen governance to ensure that security vulnerabilities and licensing risks are properly managed.
For trading technology providers, the rise of open-source presents both a challenge and an opportunity: they must balance offering value-added services on top of open frameworks while continuing to deliver bespoke solutions for firms seeking a competitive edge.
“Open-source technology, the great cloud migration and tech accelerators are changing institutions’ calculations when it comes to developing high-performance trading systems,” notes Matt Barrett, CEO and co-founder at electronic trading technology solutions provider Adaptive. “Proprietary technology is more accessible and faster to implement in 2025 than ever before – with reduced time to market, costs and complexity. Building technology from scratch is no longer the preserve of firms with extensive tech budgets, but an increasingly viable option for a growing number of firms of all shapes and sizes. In 2025, we can expect the further erosion of firms’ reliance on off-the-peg technology. No longer the path of least resistance, purpose-built technology addresses market nuance and specialized client needs.
He continues: “Over the next 12 months, we can expect firms to reconsider their technology strategies, focusing on creating more seamless workflows, reducing operational complexity, enhancing resilience, and improving user experience. We can also expect firms to adopt a long-term perspective on the role of technology in their businesses in order to integrate new and emerging technologies such as 24/7 trading, cloud-based trading, leveraging AI, and streamlining multi-asset systems.”
6. Rising Data Costs
The rising volume and cost of market data is becoming one of the biggest challenges for trading firms, particularly as fragmented liquidity, new asset classes, and more complex trading strategies drive the need for both real-time and historical data feeds from multiple sources. As trading becomes more data-driven, firms are consuming larger quantities of market data, reference data, and analytics, often across multiple venues and jurisdictions. However, the cost of accessing this data—particularly exchange fees for real-time market data—continues to rise, squeezing profit margins and forcing firms to reevaluate their data strategies.
To manage these costs, firms will need to focus on data optimisation and cost transparency. This includes identifying redundant feeds, prioritising critical data sources, and consolidating vendor relationships to negotiate more favourable terms. Additionally, cloud-based data platforms and smart data aggregation tools are emerging as solutions to help firms manage large data volumes more efficiently, ensuring they only pay for the data they truly need. There is also growing interest in alternative data sources and on-demand pricing models, where firms pay based on usage rather than flat fees, making data consumption more scalable. Ultimately, firms that can effectively optimise their data consumption and integrate it into trading workflows will gain a competitive advantage by balancing cost efficiency with the need for high-quality insights.
“The cost of data will continue to pose challenges and increasingly firms will not invest in buying, owning and cleansing vast amounts of data but rely on trusted vendors instead,” anticipates Paul Humphrey, CEO at BMLL, the provider of harmonised Level 1, 2, and 3 data. “Data engineering presents significant challenges not just in terms of in-house capabilities but also budgets; this is at a time when firms realise more and more that it’s what you do with the data that matters, rather than owning it. This inevitably leads to firms using managed data services from providers who leverage lower-cost cloud infrastructure to deliver high-quality, multi-asset, real-time and historical data directly into the user environment. This allows for easy access to crucial data sets that help market participants understand liquidity dynamics and make better informed decisions.
“The second trend that ties firmly into the costs of data is ‘buy-to-build’,” he continues. “We are seeing more firms choosing high-quality data from a trusted vendor and building their own products on top of that. Ready to use data, easily accessible in one harmonised format removes the burden of data engineering and helps users move straight into production, reducing time to insight and time to market.”
As we move into 2025, the trading technology landscape is poised for meaningful transformation, driven by regulatory changes, evolving market structures, and practical shifts in technology strategy. While headlines may be dominated by AI, the most immediate challenges and opportunities lie in adapting to new settlement cycles, embracing open-source innovation, and managing the rising cost of data. Firms that recognise these shifts early and take a proactive, strategic approach will be best positioned to navigate complexity and seize competitive advantage. Success in the coming year won’t just come from chasing hype—it will come from getting the fundamentals right and future-proofing trading operations against the real drivers of change.
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