Nearly half of buy-side firms across Europe and the US are considering changing their OMS and EMS trading platforms, according to a study by research firm TABB Group. Survey respondents cited their desire to consolidate front-office systems and the pursuit of enhanced performance as the main drivers for changing systems.
The study, “OMS or EMS? The Buy-Side Perspective on Selection and Convergence”, reports that global spending on equity-focused OMSs and EMSs has declined 13% and 11% respectively since 2007.
“The days when growing asset bases resulted in an abundance of commissions – and investment banks could provide trading applications for free – are coming to an end,” said Kevin McPartland, senior analyst at TABB. He added that instead of selecting all and any systems, “In 2009, consolidation is the trend.”
The study also showed that the number of EMSs on the buy-side trader’s desktop will shrink by 50% by 2010. Some firms are dispensing with their EMS for the new trading functionality of their OMS, while others are switching from a complex and expensive OMS to a single EMS that delivers functionality that previously only an OMS could.
A convergence of the OMS and EMS, the OEMS, is unlikely to come to fruition in the coming years as trading systems providers lean towards either the EMS or OMS “to remain focused and competitive”, said TABB.
The report was based on the interviews with 178 buy-side firms.