Conference Dailys TRADETech FX Daily 2018 | Seite 15

THETRADETECHFX DA I LY
market review
REDUCING
the
HUMAN
TOUCH
Buy-side priorities have been historically dominated by regulatory
concerns, but a survey of senior FX buy-siders carried out by Worldwide
Business Research suggests that automation is now taking over. The
TRADETech FX Daily examines the benefits, challenges and progress as
asset managers look to reduce the human touch on trading desks.
I
t’s no secret that inadequate technology will be
costly to the buy-side. Now, more than ever, the
buy-side is embracing the use of new technologies on
trading desks as a matter of urgency, where, in some
instances, it is taking priority over human traders.
Research implies that buy-side trading desk
budgets are moving in favour of technology at
the expense of trader compensation. Greenwich
Associates published a report in February which
found that budgets for buy-side trading desks have
remained relatively flat in recent years, but traders
could see a drop in compensation and bonuses as
those budgets pivot towards investments in tech-
nology. On average, asset managers spent 70% of
budgets on compensation and 30% on technology,
but last year the allocation had shifted noticeably to
60% on compensation and 40% on technology.
At the beginning of this year, Worldwide Business
Research (WBR) spoke with 100 heads of trading
and foreign exchange (FX) buy-siders across Europe
to discuss the use of technology on trading desks,
ahead of this year’s TradeTech FX Europe confer-
ence. It produced some interesting results, but the
most prominent message from the buy-side by far
was that automation is quickly taking precedence.
A staggering 77% of respondents said that re-
ducing the human touch on FX trading desks is
presently their biggest priority. Better pricing and
execution, reduced trading costs and improved con-
trols were highlighted by respondents as significant
benefits to reducing the human touch and increas-
ing automation on trading desks.
“I agree that reducing human touch on the FX
desk should be the top priority here,” Alex Smyth,
head of trading at Florin Court Capital, says about
the results. “The automation of FX flow will allow
for reduced trading costs via investment in scalable
technology which can automate human workflow.
“For example, it can allow for faster trading by
executing multiple orders simultaneously. It can
also result in improved controls via reduction in
human error, and allow for greater optimisation by
freeing up time spent on ‘button clicking’ to focus
on execution review.”
The official newspaper of TradeTech FX Europe 2018
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