A Transforming World for Broker Dealers

US Regulators are seeking a “Culture of Compliance” among trading firms. Global regulators are increasing their scrutiny of market manipulation. New regulations are requiring broker dealers to know more about technology use among their clients than ever before.  Pre-Trade risk controls are actively being monitored. Capital requirements are growing. Market data charges are increasing. Vendor total cost of ownership is rising. More and more BDs are under pressure to cut costs, especially staff.

This transformation doesn’t appear to be slowing in 2016.

Ten years ago compliance didn’t need to have in-depth knowledge of technology and its application to trading at each client. Operations staff didn’t have to maintain knowledge of who uses what technology and which types of market data because their vendors were responsible. Sales teams didn’t need to manage profitability and capital requirements so closely. Financial planning teams were able to manage capital sufficiently based on spreadsheets. Their data wasn’t available in real time. Risk managers didn’t need to be aware of open orders in the client order book.

Today they do, or at least should.  

In this transforming world BDs need to be innovating and leaping ahead. Trying to only respond to an immediate requirement will result in not being ready for the next big change. Broker dealers need to look to innovate past the short term and adopt new #FINTECH, new procedures, and new ways of thinking to rapidly evolve.

In the past my teams have helped implement global order routing systems, regional execution management systems, trader tracking, market data tracking, and more.  These systems often took over a year to implement.  The Broker Dealers, and our industry, can no longer gamble on years. We need to find ways to be more agile, more nimble. We need to respond creatively like entrepreneurs who believe we can transform our world. We need to be able to try new technology that can be deployed quickly and utilized efficiently.

In my world, I am looking to  #MachineLearning, #datascience, and people who can visualize data differently than before to provide hints and clues in order to transform.

How are you responding to the need to transform?