The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Innovation Delivers Improved Trading Performance, Lower Costs and New Opportunities

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.

Related content


Recorded Webinar: Managing unstructured data to ensure regulatory compliance and add value

As unstructured data floods into capital markets in the wake of traditional structured data, firms must manage both data types and ensure ease of access to extract data required for regulatory compliance efficiently and effectively. Beyond compliance, firms can add value to the business by gaining a clear understanding of their unstructured data, integrating the...


Cloud, Trading Infrastructure Modernisation, Digital Transformation Are Hot Topics at This Year’s TradingTech Summit Virtual

The three key themes of Cloud, Trading Infrastructure and Digital Transformation underpinned A-Team Group’s 2021 TradingTech Summit Virtual earlier this week, which brought together speakers and panellists from across the financial markets technology sector. Irina Sonich-Bright, Managing Director at Credit Suisse, in conversation with A-Team’s Andrew Delaney, started proceedings by giving an upbeat outlook on...


RegTech Summit London (Redirected)

Now in its 4th year, the RegTech Summit in London explores how the European financial services industry can leverage technology to drive innovation, cut costs and support regulatory change.


Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...