The main Algorithmic Trading Survey is now at the half -way stage, and early indications suggest that 2016 will see a further strengthening of trends seen over the last two years as the industry has matured. Customers want something that is easy to use and gets the job done – not obviously complex requirements. Ease-of Use ranks number one of the aspects of service that clients prioritise, based on results in so far. The importance of this factor is even more pronounced among hedge fund clients than overall, but even long-only managers have it as #1. The second key priority currently is Execution Consistency, again more pronounced among hedge fund respondents.
In terms of actual scores, these are presently running a little better than a year ago. Ease-of-Use has an average score at the midway point of the Survey of almost 6.00 on the 7 point scale. In this area all clients seem to be very happy that providers are meeting their needs. However, satisfaction levels around Execution Consistency are not as good as providers would like at this stage in the process, but remain above average.
Among providers, Credit Suisse, UBS, Morgan Stanley, Instinet and Bank of America Merrill Lynch continue to attract the major share of responses. While all five have been consistently among the front runners as responses come in, the order has changed and there is plenty of time for it to change again. Among the next group, J.P. Morgan has a chance to move up to the top group, but as things stand Goldman Sachs is not generating the level of responses that we would expect based on previous years. Again there is time for this to change and we look forward to the usual rush of responses as the Survey draws to a close in a few weeks.
So there is a lot to play for as providers gear up to put themselves in a position to win awards at the prestigious Trade Awards dinner later in the year. Quite simply history shows that the banks with the most responses are best positioned to win most awards.