What We Learned at TradeTech

Industry participants met in Paris to look beyond MiFID II and Brexit and understand the future direction of travel for capital markets. With the continued regulatory emphasis on improving transparency and accountability, future disruption and innovation in European capital markets is likely to come from the increased use of data and analytics as firms look to measure performance and deliver execution outcomes.

As the buy side seeks to independently optimise decisions in portfolio construction, venue selection, execution strategies and timing, the growing partnership between alternative and traditional datasets is creating unique value-add for asset managers. Yet, this requires buy-side firms to determine exactly how and where to leverage data and then how to best purpose these datasets within existing workflows. It is not being able to access data but being able to extract the value where optimal investment opportunities lie.

Although there was considerable debate around the potential for machine learning (ML) and artificial intelligence (AI) in financial markets, in reality the scope of use still remains fairly limited. To improve, firms will not only need to commit financial resources but also address necessary cultural change. Although the enhanced use of technology and data will empower both traders and PMs to make more informed decisions and benefit from efficiency gains, firms also need to focus on ensuring diversity of thought within trading and investment teams to deliver on the new opportunities available.