It’s no surprise that respondents in the latest TradeTech survey cite integrating data as the most important use for OEMS tools. Today’s trading firms are swamped with choice, from multiple lit and dark venues, through to complex order types, algos and data.
In reality there is far too much information in multiple systems on multiple venues for traders to digest at any one time. While the OEMS should be central to collating information and flow, many complex OEMS systems find themselves bound up in their own flexibility resulting in hard to maintain, inefficient workflow.
Limited data sets are stifling innovation
Many OEMS systems are relatively closed from a functional perspective. Their natively available data sets are often limited making it very awkward to navigate and control large amounts of electronic order flow or specialist liquidity seeking / routing tools within the system.
For example, a dark seeking tool with multiple layers of rule complexity that isn't capable of being influenced by external datasets doesn't promote individuality amongst clients. It ultimately stifles the clients ability to innovate as decisions based on standard data get bogged down in a complex hierarchy of rules no one understands or wants to change.
Is AI the answer?
According to the survey, AI is highly utilised within trading firms. However, in isolation and without the right data it can’t realise it’s true potential of augmenting the trader on the desk and improving trading efficiency.
AI can produce fantastic insights, but these have to be presented at the correct time and place to make an impact.
For firms to make real gains in improving execution quality, all of the pieces of data have to work seamlessly together. This is where the modern OEMS should come into play.
Integration is key
Reducing risk was the main driver cited by organisations when using analytics to make more informed trading decisions. There is a huge amount of analysis available on venues, execution, client and price providing unparalleled levels of information. Along with AI, they can provide the real insights the business needs.
These should be integrated into the OEMS so that key values can be used where required in automated routing, trading and, of course, reducing risk. However, many OEMS’ continue to have restrictive APIs which often limit the amount of integration possible.
Being open is essential
With many firms looking to develop the data management capabilities of their OEMS into 2022, it’s essential the OEMS is open with suitable APIs.
The OEMS should be able to control and be controlled by third party systems.
Thanks to smart desktop interoperability, many of the analysis tools and CRM platforms can be integrated in their native visual form for the traders on the desk. This can help give the trader real additional insight, but only if the OEMS is open.
Ultimately, the modern OEMS should be the conductor of the trading process, ensuring all of the pieces work seamlessly together to make the right decisions. Making it open, flexible and able to integrate fully with any third party applications or data sets on the desk, will allow the client to innovate whilst providing a solid backbone to the business.
This article was originally published in the TradeTech report - Evolution of trading strategies, technology challenges and investments for 2021 and beyond.
Evolution of trading strategies, technology challenges and investments for 2021 and beyond.
Find out about the challenges which buy-side and sell-side firms have faced this year and the innovative solutions they are putting in place.
