The trading landscape is evolving rapidly, shaped by technological advancements, regulatory shifts, and changing market dynamics. As firms look to the future, several key factors are expected to have a significant impact on trading practices. In a recent survey conducted by WatersTechnology in collaboration with Iress, industry professionals shared their perspectives on the most pressing challenges and opportunities influencing trading today.
Regulation continues to be a major force in shaping market behavior, with over three-quarters of industry participants anticipating increased regulatory oversight in the coming years. This shift will require firms to adapt their operations, ensuring compliance while maintaining efficiency and competitiveness.
Beyond regulatory concerns, firms are prioritising talent acquisition and technological transformation. With over half of market participants identifying these as critical areas, companies must strike a balance between hiring skilled professionals and leveraging automation and data-driven decision-making to maintain a competitive edge.
A key shift in recent years has been the growing reliance on data analytics, with more than 80% of firms reporting that analytics has significantly influenced trading functions, leading to more informed decision-making and improved trade execution. As firms increasingly adopt automated and algorithmic trading systems, they are also turning to artificial intelligence and machine learning to enhance accuracy, transparency, and predictive capabilities. These technologies are not only improving efficiency but also reshaping trading strategies and market responsiveness.
Looking ahead, distributed-ledger technology and advanced data analytics will further transform market operations, reinforcing the industry's shift toward automation, intelligence, and seamless execution.
However, the journey toward innovation is not without obstacles. Resistance to change remains a major barrier, with a significant portion of the industry citing entrenched mindsets as a challenge. Additionally, legacy systems, high costs, and regulatory complexity continue to slow the pace of transformation. Despite these challenges, the benefits of AI in trading are widely recognized. Nearly 70% of respondents believe AI-driven solutions will enhance research accuracy and transparency, while others see improvements in liquidity identification and trade execution as key advantages.
To stay competitive, firms must embrace AI, data-driven decision-making, and regulatory adaptability. Those that proactively integrate emerging technologies while addressing operational and regulatory challenges will be best positioned to thrive in the future capital markets ecosystem.
Get the full insights in our latest report in collaboration with WatersTechnology: Read the full report here.
