About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Innovation Delivers Improved Trading Performance, Lower Costs and New Opportunities

Subscribe to our newsletter

Time series databases, predictive analytics, ultra-low latency network products, sophisticated algorithms and artificial intelligence are on the wish list of many trading firms looking for innovative technologies to improve trading architecture and support high performance trading. They do, however, come with challenges, cost implications and the need for management buy-in.

Speaking on a recent A-Team Group webinar covering innovation in trading architecture, Jason England, head of capital markets networks and hosting at TD Securities, noted that adoption of bleeding edge technologies has stagnated over the past few years, but is now on an upturn, although any new technology adoption must be proven to bring benefits.

In terms of types of high performance technologies finding favour at the moment, a poll of webinar participants noted time series databases, predictive analytics and ultra-low latency network solutions among top picks. These were augmented by Thomas Kennedy, head of analytic services at Thomson Reuters, who said the sell-side is looking at everything from data origination to quantum computing, while the buy-side is focussed on multi-asset and predictive tools that deliver efficiency, lower costs and speed to decisions. England added the potential of shortwave radio to reduce trans-Atlantic latency.

The challenges of implementing innovative trading tools include legacy systems and the difficulties of convincing management to make the necessary investment. The speakers suggested buy-in is sometimes dependent on whether a technology is a capital cost or a recurring payment, and noted that some technologies are easier to test than others and some may need to go through the proof of concept process. Cloud solutions offer the best try before you buy option.

Similarly, return on investment is easier to demonstrate with some solutions, such as FPGA network switches, while the return on less well-defined solutions or extensions to existing strategies is harder to quantify.

On a more technological level, the speakers discussed challenges of implementing new technologies including keeping clocks synchronised, data modelling to accurately map and link structured and unstructured data, and implementing standards such as FIX.

From a regulatory perspective, Bob Van Valzah, a former performance engineer at Sun Trading, said Markets in Financial Instruments Directive II (MiFID II) and forthcoming Fundamental Review of the Trading Book (FRTB) regulation will drive innovation in trading architecture to a limited extent.

With cost issues, technology challenges and regulation potentially holding back innovation, a final poll of the webinar audience drove home the rationale behind investment in new technologies for trading architecture with 86% of respondents gaining, or expecting to gain, improved trading performance, 71% new business opportunities, 71% reduced costs of trading, and 43% competitive advantage.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Detecting and preventing market abuse

Market abuse – unlawful disclosure of inside information, insider trading, circular trading, “pump and dump” schemes, etc. – poses significant threats to the integrity of capital markets. In 2024, global trading house Trafigura agreed to pay a $55 million fine to the U.S. Commodity Futures Trading Commission (CFTC) for trading with non-public information, manipulating a...

BLOG

From Capture to Context: Transforming Voice Comms Compliance with Theta Lake

In today’s financial landscape, voice communications compliance extends beyond simple capture and retention – it demands contextual insight and integrated oversight across multiple platforms. Firms grapple with fragmented systems, complex cloud environments, and regulatory pressures that require a more holistic compliance strategy. In this video interview, Adrian Sharp, RegTech Insight Editor at A-Team Group, talks...

EVENT

TradingTech Briefing New York

Our TradingTech Briefing in New York is aimed at senior-level decision makers in trading technology, electronic execution, trading architecture and offers a day packed with insight from practitioners and from innovative suppliers happy to share their experiences in dealing with the enterprise challenges facing our marketplace.

GUIDE

The DORA Implementation Playbook: A Practitioner’s Guide to Demonstrating Resilience Beyond the Deadline

The Digital Operational Resilience Act (DORA) has fundamentally reshaped the European Union’s financial regulatory landscape, with its full application beginning on January 17, 2025. This regulation goes beyond traditional risk management, explicitly acknowledging that digital incidents can threaten the stability of the entire financial system. As the deadline has passed, the focus is now shifting...