[ T H O U G H T L E A D E R S H I P | F A C T S E T ] proprietary ML based optimisation solutions . They have done this as a source of competitive advantage and to control the development and science behind it .
Where is FactSet focussing its efforts for traders ?
FactSet is investing heavily in EMS technology upgrades , which includes a front-end rewrite and back-end rearchitecture . This investment is important for the delivery , usability and upgradeability of the EMS . Using web technologies and cloud native architecture takes us forward significantly . This investment is a real statement of intent and commitment to our clients – future-proofing our technology and enabling enhanced capabilities .
We work with some incredibly progressive traders , execution analysts and technologists , so the feedback we get is core to our product strategy . A particular area of focus is trade analytics . The EMS is at the centre of execution decision making , so all data , insight and decision support should be there front-and-centre and context sensitive . Traders also need immediate access to summary data and time-series reports empowering them for wider stakeholder engagement .
More broadly , FactSet has made considerable investments in its front-office capabilities – particularly in the portfolio lifecycle from risk & performancecentric portfolio management , through compliance , order management and execution management . We believe that asset managers want to simplify their technology relationships , consolidating and extending with
Rob Watts , head of equity business development for trading solutions , FactSet
trusted partners that are capable of adding value across a wide spectrum of their business . That said , we maintain an ‘ open and flexible ’ philosophy and have made our technologies and data sets API accessible via the FactSet Open Marketplace , so that ‘ best-of-breed ’ is well-supported .
Outsourced trading – what ’ s FactSet ’ s view ? Outsourced trading is not a new concept and while there has been a lot of promotional noise in the last year , each firm will review this on its merits , considering service model , asset class and markets coverage , expertise , cost , engagement with fund managers , and most importantly , the execution performance . Will it deliver significantly better results than a standard agency broker relationship ?
Certainly , it is hard to see portfolio managers at larger firms being convinced that they will see greater levels of access , market expertise , collaboration and knowledge of their portfolio strategy by outsourcing . There are also going to be lingering concerns about priority in volatile markets and regulatory obligations .
If the costs and value of a trading desk are being scrutinised , then EMS technology can be put to good use , to deliver incredibly efficient automated trading processes and ensure that in-house traders have the time to provide high standards of service to PMs and contribute to overall portfolio performance .
The trillion-dollar club - what are the implications of the race for scale ? The concentration of the market in fewer , larger firms is an inevitable evolution of the market , driven by the cost pressures caused by passive funds . The M & A dealmaking in the last few years has shown that scale , global coverage , and breadth of products are goals many firms are chasing .
Every trading desk is looking at their level of efficiency across asset classes and capacity to increase volumes , so the ability to replicate sophisticated execution decision making processes at scale is incredibly important .
Any head trader who is part of a merger will want to be able to represent that they have their EMS technology and analytics dialled-in and ready for the demands of the expanded business .
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