[ T H O U G H T L E A D E R S H I P | F A C T S E T ]
Empowering traders with technology
Rob Watts , head of equity business development for trading solutions at FactSet , tells The TRADE about the impact of the latest technologies and trends on institutional traders .
Where is FactSet leading the market in execution management ? We lead the market in multiasset trade automation , working with many of the largest and most complex buy-side trading operations to achieve a very high standard of efficiency . We see automation as being the number one reason for asset managers evaluating new EMS technology and this applies to a wide cross-section of the market . Automation is not simply about basic algo-wheels and smallscale order routing but considers the entire trade process and the opportunities for efficiencies on a high-volume desk , including many traditionally high-touch processes . We are essentially replicating all manner of data , liquidity and timing-based decisions of the trader , at scale .
Is automation a threat to traders ’ roles ? It ’ s quite the opposite . It removes the mundane , focuses skillsets and frees up time for greater engagement with portfolio managers . Traders know they need consistent , structured , unbiased and data-driven decisionmaking and this is exactly what sophisticated automation provides .
Traders ’ roles and skillsets have changed over the years – they are highly technical and analytical . They see how the EMS can be a source of advantage and competitive differentiation . They work with us as partners to iteratively increase the sophistication of processes , to achieve improved results and efficiency . The trading desk ’ s value and contribution to portfolio performance is always top of mind .
Where else does an EMS add value ? In all wish-list surveys , you ’ ll see flexibility featured at the top . It ’ s important that the technology can support each individual client ’ s workflows , preferred data and analytics , decision making process , internal and market communication needs . There is a spectrum of complexity and scale in this market but interestingly , each client we work with has their own unique process and ambitions for leveraging their EMS . If the technology successfully supports that , then it ’ s invaluable .
Where does AI fit into the equation ? FactSet was an early mover in the AI / ML space and so we have some significant insight as to the potential as well as challenges that such technology offers . Indeed , FactSet has a dedicated cognitive computing team , leveraging AI , ML and NLP , to bring pertinent content and insight to a user ’ s attention . Certainly , the volume of data and scope of variables facing traders lends itself to the power of machine learning and predictive analytics , however there is still an inherent need to understand the logic of the system . For many firms that have not yet adopted much in the way of automation on their trading desk , the idea of jumping straight to the use of AI is missing a step . They have many benefits to realise from non-AI automation logic .
Those asset managers that do have the budgets , expertise and very high degrees of automation have in many cases developed
26 // TheTRADE // Spring 2021