At the Fixed Income Leaders Summit Europe 2023, panellists discussed the shifting landscape of OEMS platforms, the ways in which they can better equip traders with tools to tackle challenging market environments and how to navigate advancements within the space.
Panellists highlighted that with OEMS platforms, people are looking for scalability and the ability to process large data sets which cloud offerings are trying to push as their main benefits.
“We are seeing a lot of adoption from both the vendor market and the buy-side for cloud services and there has been a huge shift in terms of internal policies when it comes to IT and administration,” said Michael Loggia, global head of workflow technology at Virtu Financial.
“A few years ago, if you said you were putting everyone’s data in the cloud, there were concerns about how to secure that. However, now it is a lot more acceptable practice and it is semi-expected.”
Panellists also highlighted that OEMS platforms have evolved quite quickly over the last few years, with a lot of innovation particularly in fixed income. Data – as has been discussed in various panels at the conference – was noted as being crucial for this evolution.
“We need good, consistent data sets in order to build logic to automate and make informed decisions,” said Martin Hendry, deputy head of trading at Liontrust Asset Management.
“Technology and the EMS side of things goes hand in hand with that data set. We need capability and the ability to customise to our own workflows – there’s no out-of-box solution for everyone.”
Modular OEMS platform models, which group together various data points, were noted as being beneficial to traders and their workflows, reducing the need to access information from different sources for connectivity. Essentially, this can help traders decide what they want to get out of a system.
“When you put that all into one dashboard, it becomes very powerful. A trader will no longer have to step outside of all these different screens and can instead focus on the trading,” added Loggia.
Speaking on what the ‘holy grail’ from an OEMS offering would look like, Hendry noted that it is all about where that platform fits into the multiple liquidity channels traders have access to.
“We want to automate the simple, straight forward trades in a sensible way and have that constant feedback on whether it is working and whether rules are in place appropriately,” highlighted Hendry.
“Secondly, when we route outside to a platform, what rules are we looking at in order to execute that business? There’s a lot of trader bias in that decision making at the moment which we would like to remove and instead have a logical process built on data points from those platforms.”
Speaking on the advantages of using an EMS for fixed income trading versus an OMS centric workflow, Loggia noted that, in general, EMSs move a lot quicker than OMSs do when it comes to development and being able to react to the market and new products.
“EMSs were always built to be more of a trader-centric workflow, whereas OMSs are bigger pieces of software that fill a lot more infrastructure, accounting and portfolio management needs. Ultimately, EMSs are a better tool for equipping a trader to understand where they have traded in the past, how pre-trade analytics look, what data points are relevant and being able to quickly and efficiently create either a manual or automated workflow for the market you want to participate in and capture that data.”