The financial technology space is always moving and aiming at moving targets. Justin Llewellyn-Jones COO and global head of derivatives for Fidessa, said firms now are facing broader and deeper technology challenges than ever, from real time order analytics to new cyber security needs.
Speaking with John Lothian News at the FIA IDX conference in London, Llewellyn-Jones said Fidessa has been focused on expanding its execution algorithms, an initiative that was moving forward over a year ago.
“We’ve been extending that set of algorithms in terms of the synthetic order types, the execution types we cover, the benchmark algorithms.”
Now Fidessa is pushing realtime order analytics, which is a set of analytical models that focus on the order that is being placed and its impact on the market.
“What that allows the trader to do is actually look at the quality of execution they are achieving, as the algorithm is executing or even a high-touch single care order, and start changing the parameters around that order to achieve a better quality of execution.”
Llewellyn-Jones said this functionality also opens the doors of communication between brokers and customers, allowing brokers to find better ways to execute a trade.
“That gives a better relationship with the client,” he said. “That gives a better quality of execution at the end of the day as well.”
For Fidessa, the goal is extend this concept out to “predictive analytics,” which can help firms identify and fine tune trading and execution quality.
“The next stage of this is going to take those analytical models and actually apply them against future orders,” he said.
Along side better functionality, Fidessa is also looking beyond traditional trading platforms.
Already with connectivity to equity, options and derivatives exchanges, the firm is looking at ways to connect to swaps markets and other cash-based platforms.
“The cross asset story, in a single platform, is very interesting to our clients,” he said. “At a time when cost efficiencies are pretty much the main driver, anything that can reduce the cost for FCM or the prime service of a bank as a whole, is very interesting to the client.”
Llewellyn-Jones added that cybersecurity is becoming increasingly important. Bank and corporate hacks along with exchange failures (whether they were technical glitches or not), have eroded confidence in the markets.
“I think the other area we really do need to start looking at is information security, cyber security,” he said, adding that Singapore’s regulators have detailed provisions every firm must have to comply with security issues. “That’s going to create yet another regulatory burden on us, so the technology we are using has to adhere to a much, much higher level of security, audit and threat assessment, and the vendors in this space are going to have to do a lot of work to keep up.”
He recommends an industry-wide approach to begin to holistically address the cyber security issues so firms of all sizes can more easily comply.