The TRADE’s best of 2019: Technology

John reviews the best of The TRADE News’ coverage of technology over the past 12 months.

Projects around the expansion of data have been a focus of attention for the industry this area, particularly when it comes to cloud technologies. As the volume and complexity of data continue to increase, the buy-side is investing heavily in cloud technologies to keep up with their data management operations, although this trend is not completely limited to the asset management community. With the demand for more sophisticated and powerful cloud capabilities only set to increase, the presence of technology giants Amazon Web Services (AWS) and Google Cloud have become more pronounced in this space, with partnerships between the former and Bloomberg, and the latter and both CME Group and Deutsche Börse being launched this year.

While the implementation and development of artificial intelligence (AI) and machine learning projects have continued apace in the industry, attitudes have noticeable shifted. Buy-side representatives at some of the industry’s biggest conferences ditched the usual hyperbole in favour of more nuanced opinions about the transformative potential of AI, extolling the virtues of patience and long-term planning or just straightforwardly dismissing the misconceptions of what AI is actually capable of. Despite the dangers and pitfalls that technology hype present, the buy-side is powering on with AI adoption and it looks certain to be a central facet to asset management strategies for the foreseeable future. The sell-side, for its part, is also heavily investing in AI for the future, evidenced through financing deals such as that led by Goldman Sachs in start-up

One of the most interesting technology stories of the year also featured an industry-first, as BNP Paribas took a leaf out of Silicon Valley’s book with a Siri-style digital trading assistant, which launched alongside its real-time market analytics and interactive algorithms as part of major upgrade to the bank’s Cortex FX trading platform.

The TRADE’s annual Execution Management Survey found that EMS providers will have many reasons to be pleased, as scores continue to rise as the industry moves further away from the compliance-focused days of two years ago when MiFID II came into play. However, there are signs that some providers may be resting on their laurels, falling behind the high standards their peers have set in this year’s survey.

The fire around cryptocurrencies and digital assets may have not burned itself out entirely this year, but it is certainly dimmer than what we saw in 2018. In January, the European Markets and Securities Authority (ESMA) stated that certain crypto platforms should be subject to MiFID II rules on trading, while the chair of the European watchdog said the following month that regulators should show “objectivity and open mindedness” when it comes to developing frameworks for the supervision of crypto-assets and distributed ledger technologies. The lack of clearly defined regulation for crypto-assets hasn’t put major industry players off developing their own offerings, with Deutsche Börse outlining its plans for a regulatory compliant, full crypto ecosystem in March, while one of the buy-side firms to invest in the space with conviction, Fidelity Investments, announced at the end of the year that it would be bringing its own platform and custody services to Europe after first launching in the US last year. The less said about Facebook’s much pilloried entry into the space with its Libra project, the better.

There were markedly fewer big money acquisitions in the last 12 months compared to the previous year, but it was the analytics space that was most notable. In September, SS&C Technologies agreed to acquire risk analytics products and services from IBM’s Algorithmics division, expanding its range of data products, while in October, cloud-based portfolio analytics and data services provider StatPro was acquired by investment data automation specialist Confluence Technologies for just over £160 million. Elsewhere, Liquidnet completed deals for marketplace and aggregator RSRCHXchange in May and natural language processing (NLP) specialist, Prattle, a month later.