Demand fueled by low latency competition, regulatory pressures and an increased focus on client relationship management
Interactive Data, a leading global provider of managed ultra-low latency technology and market data feed services designed to facilitate electronic trading, today announced its 2015 predictions for capital markets trading technology. These predictions focus on the increase in managed services to minimize risk and improve client relationship management.
A heated regulatory climate in 2014 in connection with high frequency trading post-Flash Boys placed a renewed attention on infrastructure and led to some firms deferring major infrastructure decisions last year. This infrastructure focus will likely carry over to 2015, as more firms look to reduce their total cost of ownership (TCO) while simultaneously increasing their flexibility related to trading technology. Against this backdrop, Interactive Data has identified five key areas where capital markets’ priorities and spend will be focused in 2015:
As data consistency, transparency and reliability continue to evolve, firms will focus on standardization, metrics and full visibility into their own operations in order to meet regulatory requirements and to properly manage data.
There will be continued demand for big data support, transaction monitoring and new banking technology, all at a low cost and low latency to reduce TCO and risk.
Consequently, and in parallel with a growing market acceptance of outsourced and “cloud” based services, there will be an increased appetite for managed services as firms strive for cost containment and increased efficiency. By outsourcing, firms will be able to focus on their core competencies and true market differentiators without sacrificing quality of technology infrastructure.
2015 will also bring an increased number of organizations who are satisfied with being “fast enough” rather than the fastest. Low latency demand will be balanced with increased requirements for infrastructure predictability and stability. The focus will be greater on transparency, consistency and reliability.
A renewed interest in client relationship management will also be important in 2015. Many firms are willing to spend on headcount to support client satisfaction and superior service levels instead of faster switches to increase trading speed. Only a small group of firms still believe speed is their true differentiator. The majority will look to spend on reliability and service, as a more sustainable driver of customer interaction and satisfaction.
"In 2014, Interactive Data helped global capital markets firms quickly implement trading technology to meet near-term trading needs with a low commitment level and the flexibility and scalability to address future needs," says Sean Brown, President of Interactive Data's 7ticks business. "In 2015, we expect firms will reevaluate their internal infrastructures and look for ways to cut costs, minimize risk, increase efficiency and optimize the customer experience. Interactive Data is helping to navigate these changes, which fueled double digit revenue growth in our 7ticks business over the last year. In 2015, we expect that demand to increase as we help our clients achieve faster time to market and lower total cost of ownership."