Predictions for 2019: Trading and technology

Experts from across the industry provide their predictions on what will be the biggest trends of the coming year.

Miles Kumaresan, CEO, WaveLabs

The tech arms race is about to gain significant momentum in fixed income. In general, all aspects of current market practice for this asset class will be challenged. The first low-hanging fruit to be picked would most likely be the mining of RFQ data every buy-side has – a model to recommend to traders the best counterparties to issue an RFQ to, based on historic RFQ. Next, many buy-sides would look into keeping a normalised repository of all available data for further analytics. The big push will come be in the form of a “seamless and enhanced workflow”.

Other interesting work would be in the area of smart liquidity seeking algorithms, new tools to increase all-to-all trading and price discovery. More and more sell-sides will try to offer tradeable streaming prices.  Finally, new block trading alternatives are also likely to emerge.

Alasdair Haynes, founder and CEO, Aquis Exchange

I believe 2019 will be the year that crypto currencies and tokenisation either go big or go home. The time has come for these new asset classes to become more understood, used and possibly even regulated. If that doesn’t happen in the next year or so, I think this business may just remain a niche within the financial services industry and miss its window of opportunity.  

Adam Toms, CEO, OpenFin Europe 

With MIFID II and Brexit planning (relatively) under control, 2019 will see a wide-ranging step up in resources focused on innovation.  Digital transformation projects will not be the domain of just the largest firms, but accessible to all as the number of highly specialised application and solution providers continue to deliver next generational products and services. Platforms that foster and enable cultures of openness and collaboration will thrive, driving optimised workflows, productivity and differentiated informational advantage for end users.

Security will be front and centre on the 2019 agenda in the face of ever-increasing cyber threats.  This imperative is being formalised by the UK’s FCA and global regulators who want to see firms taking all necessary steps to mitigate this prevailing risk.

Seth Merrin, founder and CEO, Liquidnet

In 2019, achieving best execution – currently the primary task of the buy-side trader – will become much more efficient through increased automation and data-driven processes. This will free up the trader to focus on alpha generation and empower buy-side traders to shift their primary focus from saving their firms money, to making their firms money. As the buy-side trader’s role continues to evolve and demand for performance increases, stand-alone block or algo-based liquidity solutions will no longer be enough.

An increased adoption of advanced technologies for liquidity sourcing and intelligent automated execution, like artificial intelligence, will augment the buy-side trader’s ability to provide best execution. We’ll also see an increasing number of traders leveraging technology to efficiently mine both traditional and alternative data sets for actionable intelligence that can help generate performance for their firms.