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TABB Group Research Reveals Urgent Need for Sell-Side Investment in OMS

SunGard has released a new independent TABB Group research report that reveals both large and small investment banks and brokers are sacrificing order management system (OMS) functionality in exchange for aggressive cost cutting. This is coming at a time when firms’ top initiatives over the next 12 to 24 months will focus on OMS and execution management systems (EMSs) to protect and grow their business revenues.

The TABB report, The Transformative OMS: From Tickets & Timestamps to Today’s Technologies, is based on responses from 111 individuals via surveys and interviews from a broad range of brokerage firms and investment banks across North America, Europe and Asia. The key findings of the report, commissioned by SunGard, include the following:

  • Top-of-mind for all sell-side firms is the desire to consolidate OMS functionality across all asset classes
  • Current OMS functionality for futures, foreign exchange (FX) and fixed income exhibited a significant decline in satisfaction when compared to that of cash equities
  • For a large number of smaller firms, current OMS functionality is focused only on equity execution
  • In addition to maintaining at least one OMS, many sell-side firms report using an EMS (in some cases, several) to offset limitations in OMS capabilities
  • In specific categories, such as performance tracking and profitability monitoring, those “not satisfied” spiked to nearly 50 percent of respondents
  • In light of varying levels of satisfaction, total cost of ownership (TCO) plays an outsized role in deciding to remain with a sub-optimal OMS versus migrating to a different platform

“To continue proving their worth to the buy side, sell-side firms must recognize the increasingly urgent need for deployment of OMS technology capable of more than simple execution of individual assets. Today’s more complex environment requires the technological infrastructure for global multi-asset trading, compliance management, and the ability to assess client profitability.” – Alexander Tabb, partner, TABB Group

“Sell-side firms play a valuable role in helping the buy side make sense of market structure complexities and increased regulatory changes. But these firms must have the necessary infrastructure to provide greater levels of services that span multiple asset classes and trading strategies, as well as a more flexible OMS architecture through a single point of execution and analysis tools for measuring performance and profitability.” – Bob Santella, president, SunGard’s brokerage business