Order management systems (OMSs) and execution management systems (EMSs) are becoming increasingly important for asset managers looking to optimise their trading workflows, however more than half of equity buy-side traders prefer to use separate systems, a new report by Coalition Greenwich has revealed.
Despite some uptake of integrated OEMS systems in recent years, of the respondents interviewed in the study, only 28% stated that they preferred using a single platform that combines order and execution management, with 58% instead opting for a separate OMS and EMS.
Additionally, only 8% of buy-side traders use an OMS only, while a further 8% opted for a combined portfolio management and trading platform with a POEMS (portfolio, order and execution management system).
“Consolidated platforms may offer convenience and potential cost savings, but the benefits of specialised systems seem to outweigh these advantages for now,” said Jesse Forster, head of equity market structure and technology at Crisil Coalition Greenwich and author of the study.
With the majority of buy-siders choosing separate OMS and EMS platforms, the report pointed towards control, flexibility and configurability as key priorities for these traders when it comes to selecting solutions, rather than the convenience of a sole integrated platform.
Specifically, 74% of traders who use a separate EMS stated that it provided improved or greater trader functionality, while 61% pointed towards the enhanced flexibility offered by a separate system, particularly during periods of changing market conditions, as often seen in recent months.
Additionally, the report also found that traders are more focused on features such as performance, easy integration, speed, reliability, and seamless connectivity rather than the technical details of how the platforms work.
The importance of well-designed systems that provide timely customer support with dedicated salespeople was also marked as a highly important factor when it comes to traders looking into customer service offered by their providers.
The front runners
When it comes to providers, the study also pointed to the loyalties of buy-side traders when choosing their OMS and EMS systems.
Charles River and Bloomberg’s AIM were an overarching OMS preference for traders interviewed in the study, while Bloomberg’s EMSX and Virtu’s Triton also took the limelight in the EMS space.
This indicates that traders value familiarity over new offerings, however the report highlighted areas that could help new providers break into the market, such as a focus on client needs and strong technology, service and support, stating that the “playbook is wide open” in the OMS/EMS landscape.
Coalition Greenwich interviewed 40 buy-side equity traders in North America to collate the report, with interviews conducted from July to September 2024.