Internal IT departments at financial institutions (FIs) do not necessarily understand the needs of today’s traders, according to a survey looking at the relationship between the two functions conducted by IPC Systems at the TradeTech show earlier this year, which potentially highlights an increased need for cooperation.
The newly released findings of the IPC survey, which questioned 120 IT professionals and traders attending the TradeTech Europe 2013 show in London’s docklands during March, revealed that just over half of the IT professionals on the show floor admitted they did not completely understand their traders’ needs. Furthermore, just 38% of them said they felt they served the needs of traders or the trading group very well. The traders who were surveyed agreed with that assessment even more strongly, with 55% of them saying that indeed IT did not completely understand their needs. They are, of course, a notoriously demanding group to serve.
Nearly 60% of the IT respondents were management-level executives. The traders surveyed at TradeTech Europe 2013 by IPC represented a wide-range of financial services, including asset management, broker/dealers, proprietary trading employees and those at exchanges and hedge funds. Slightly more than half focused primarily on equities trading, but all major asset classes were represented including bonds, commodities, derivatives and foreign exchange (FX).
The lack of understanding between traders and IT staff exists despite the fact that 93% of IT respondents said their groups hold regular meetings with traders to inform them of potential and emerging new technologies. In addition, the issue has not affected traders’ view on the impact of technology: 100% of traders surveyed said technological changes have had a positive impact on trading, with surprisingly no-one disagreeing with the assertion.
“While traders say they are seeing the benefits of technology, it is worrying that there is a recognised lack of understanding between these two groups,” said Simon Jones, director of product marketing at IPC. “Such a ‘disconnect’ can put firms at a disadvantage; something the survey respondents recognise themselves. According to the survey, both groups believe technology is increasingly important to help deliver competitive advantage and minimise risk for trading firms. The call to action for companies in this industry is to create working environments that enable real-time collaboration on solving business problems.”
Other key findings from the IPC survey include:
Technology has been a boon to traders:
· 85% of traders say that technology has increased trading efficiency.
· 87% report increased earnings potential as a result of technological changes.
· 88% said technology has increased system reliability.
But it comes with a price for traders:
· 86% of traders say they have experienced increased performance expectations due to technological innovation.
· 77% report increased job stress levels.
· 82% report increases in the pace or volume of trades.
· 84% report increased dependence on IT support as a result of technological changes.
“It’s not surprising that technological improvements are seen by traders as a double-edged sword, and we are increasingly seeing firms looking for ways to address the issues of increased pace and stress bear watching, because of the potential to negatively impact traders’ performance,” concluded IPC’s Jones.
The financial crash of 2008 and increasing regulations since then no doubt had something to do with the increased pressure that traders are feeling too - it is not necessarily all down technological changes and a condensed trading cycle.