TS Imagine Data Highlights Accelerating Electronification of Fixed Income Trading

New data from TS Imagine points to a sharp acceleration in the electronification of fixed income markets, with growing adoption of electronic execution protocols, increased portfolio trading activity, and broader engagement across buy-side workflows.

The data also shows a 24 percent increase in total trade counts year over year, reflecting broader platform adoption and more consistent use of electronic workflows across protocols.

Andrew Morgan, President and Chief Revenue Officer at TS Imagine, says the figures point to a structural rather than cyclical shift in fixed income markets. “This data highlights how the electronification of fixed income markets is accelerating across geographies and sub-asset classes,” he notes, in conversation with TradingTech Insight. “The sharp increase in portfolio trading volumes in particular shows how trading is becoming more balance-sheet-aware and increasingly reliant on scalable execution strategies. As liquidity becomes more complex to access, execution management systems must provide traders with a unified view across execution, analytics, and risk.”

Europe shows strong adoption amid fragmented market structure

Morgan points out that Europe is showing particularly strong growth, driven in part by the region’s fragmented market structure.

“We work with a number of very large European clients trading predominantly European fixed income products, and we are seeing strong adoption there,” he says. “In some respects, Europe’s market structure – particularly the degree of venue and liquidity fragmentation in certain fixed income sub-asset classes – has actually acted as a catalyst for electronic adoption, in much the same way fragmentation did in equities.

“Adoption of new electronic protocols is global,” he adds. “Where there is a difference is in how clients engage with the technology. In the US, we tend to see more specialist fixed income desks driving usage. In Europe, many clients operate large, multi-asset businesses and are adopting these tools as part of a broader push to digitise and automate trading workflows across asset classes.”

Portfolio trading, ETFs, and holistic risk transfer

Morgan also points to the growing influence of exchange-traded funds in fixed income markets.

“ETFs have changed how risk is expressed in fixed income,” he says. “They have expanded the liquidity pool and created new opportunities for liquidity formation, which is naturally attractive to both buy-side firms and liquidity providers.”

TS Imagine’s data shows that firms already active in portfolio and programme trading have significantly increased their usage over the past year, alongside consistent growth across other electronic execution protocols.

“Across the board, volumes, trade counts, and user activity continue to rise,” notes Morgan. “That reflects a fundamental structural shift in how fixed income markets operate.”

From electronification to full workflow digitisation

Beyond execution, firms are increasingly focused on digitising front-to-mid office workflows, rather than treating electronification as an isolated capability. “The focus is increasingly shifting from pure execution to the broader front-to-mid office workflow,” says Morgan. “One of the industry’s long-standing weaknesses is siloes, which means best practices are rarely shared across desks.

“Multi-asset dealers increasingly want to operate from a single environment rather than juggling multiple disconnected systems,” he adds. “A setup that requires traders to log into a dozen different platforms is not fit for purpose; firms need a true digital cockpit that supports fast, informed decision-making.”

Digitisation is also extending upstream, particularly in private banking environments, where advisors and clients sit ahead of the dealing desk, observes Morgan. “Digitisation means bringing those participants into the same workflow, replacing phone calls and spreadsheets with integrated data and liquidity access.”

Structural change reinforced by market conditions

Morgan notes that recent market conditions have reinforced the case for electronic and automated workflows. “This has been a very active trading environment,” he says. “Markets have been moving quickly, digital liquidity has increased, and for active traders it has been a more alpha-rich landscape. But capturing that opportunity requires the right tools.”

He continues: “Volumes and revenues increased sharply last year, particularly on the sell side, without a corresponding rise in headcount. That underlines how essential these technologies have become for operating at scale. Non-bank liquidity providers have also become increasingly active in fixed income markets. They love markets characterised by volatility and information asymmetry, and they are definitely a volume driver.”

White paper points to broader European transformation

Many of these themes are echoed in a recent TradingTech Insight white paper on the electronification of European fixed income markets, which argues that the region has entered a phase of structural change driven by MiFID II transparency requirements, ETF growth, liquidity fragmentation, and the arrival of sophisticated non-bank liquidity providers. The paper highlights the distinction between basic electronic execution and full digitalisation of trading workflows, noting that firms increasingly need advanced aggregation, analytics, and automation capabilities to navigate fragmented liquidity and rising data volumes.

According to Morgan, the direction of travel is clear. “The genie is not going back into the bottle,” he says. “Fixed income has been slower to change than other asset classes, but the rails needed to digitise and electronify effectively are now in place. Algorithmic liquidity provision is a critical catalyst, and adoption will continue to accelerate.”