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will be . Adopting new technology comes with a hefty cost and processes can be time consuming to ensure appropriate and successful integrations .
“ It ' s expensive to onboard [ new technology ], particularly because there ' s always a new product selection process we need to go down and then there ' s a lot of legal work that we need to get in place ,” emphasises Cathy Gibson , global head of trading at Ninety One . “ We have a responsibility to back the vendors that we think are going to be additive to our industry and sometimes we ' ll win , but sometimes that will not be the case .”
While many new technologies come to market every year which many buy-side traders may consider as an added complexity to their day-to-day activities , there remain areas where traders are eager to see more technological development . Namely , primary issuance - the process in which new securities are created and sold to investors for the first time .
Although technology has streamlined a number of components linked to primary issuance , such as document preparation and data management , the complexity
“ The reliance on traders as we know is likely to reduce over time as one trader will be able to efficiently handle a large number of transactions .”
SCOTT CHACE , HEAD OF TRADING FOR PORTFOLIO SOLUTIONS AT
STATE STREET
18 // TheTRADE // Q3 2024 and need for human judgment has slowed down the pace of this becoming fully automated .
“ Technology that is yet to really take off is an effective primary market workflow tool ,” says Wicks . “ New issue processes remain stubbornly manual and there ' s already so much manual and voice interactions between the buy- and sell-side . This is an area where technology could and should
“ We have a responsibility to back the vendors that we think are going to be additive to our industry and sometimes we ' ll win , but sometimes that will not be the case .”
CATHY GIBSON , GLOBAL HEAD OF TRADING AT NINETY ONE
help the buy- and sell-side to make this whole process more efficient .”
Maintaining relationships Fostering personal relationships in a tech-driven world is essential to promote transparency , collaboration and market resilience . It is of huge importance that a bond of trust is established among counterparties to ensure relationships can grow .
“ Real-time responsiveness 24 hours a day is most important and tech tools enable that ,” argues Chace . “ But they also promote transparency which is key to trust building .”
For a buy-side institution to transfer execution to a sell-side broker to execute on their behalf , there needs to be trust . Today , it is essential that these interactions are cemented by data and demonstrated by proof of trade execution on a best execution basis , as opposed to simply being based purely on pre-existing relationships .
“ If a buy-side institution is becoming more automated and measuring brokers quantitatively then it ’ s essential that their execution goals are well understood by the sell-side and this can only be achieved through transparency and regular communication ,” says Winzor-Saile . “ Knowing what information is useful to the buy-side requires in-depth knowledge of their trading style and goals which is very difficult to automate .”
With increased adoptions of technological