The past decade has seen a steady shift towards automated trading, propelled by ongoing technological innovations and relentless cost pressures. While this trend will undoubtedly continue, an overly narrow focus on costs risks diverting attention from the
real needs of clients. The winners in the future of trading technology will be those who successfully blend exceptional technology with outstanding client service. After all, technology is meant to be an enabler—empowering clients rather than being an end
in its own right.
The automation revolution
We are currently witnessing a wave of technological innovation in trading that has led to the rise of automated systems promising efficiency, speed, and cost-effectiveness. Sophisticated trading solutions, such as anonymous wheels for venue selection, are
emerging, alongside a growing concentration of flow with fewer providers. This trend is reshaping how trades are executed, enabling market participants to seize opportunities with unprecedented agility.
Yet, as we embrace these advancements, a critical question arises: can technology alone satisfy the nuanced demands of today’s traders? The answer is a resounding no.
While firms strive to digitise their processes, the need for a human touch is becoming increasingly clear. Clients are not merely seeking efficiency; they want a partner who understands their unique strategies, preferences, and objectives.
Personalisation in trading
Today, clients are leveraging low-touch offerings in increasingly complex ways. They seek to consolidate their trading flows with fewer partners, aiming for improved execution quality and stronger relationships. This consolidation reflects a broader trend
where clients desire bespoke solutions tailored to their specific needs. It’s critical to remember that our clients’ primary goal is to execute trades effectively while navigating the complexities of the market.
Therefore, it is essential to integrate high levels of client service throughout trading platforms. When we designed our latest electronic trading platform, we ensured that it would not only facilitate low-touch trading but also weave high levels of client
service into the process.
This includes providing tailored execution consultancy, real-time insights, and a deep understanding of market dynamics that technology alone cannot offer. For example, clients want feedback on trade performance and insights into how their trades matched
market conditions.
A hybrid approach for the future
As the competitive landscape evolves, firms must adopt a hybrid approach that seamlessly combines automated solutions with high-touch service. The convergence of traditional high-touch sales trading and low-touch electronic trading roles is becoming more
pronounced.
Exceptional client service, transparency, and tailored solutions will be the key differentiators in this increasingly automated environment. It is clear that there’s a natural floor to the costs the industry can charge clients. This means that with price
matters – it cannot be the sole differentiator. There is the need to be price-conscious and competitive – and that those in the industry are competitive is a given - but the questions we get from clients are focused on their execution strategy and how we can
build solutions around them.
For example, clients may want to enter the market at certain points, and with specific criteria, and it’s our responsibility to build a strategy that suits their needs. This means we need to sit down with them ahead of any trading to understand what can
be high-touch and what can be low-touch. Clients understand that higher touch may come at a higher fee, but it’s crucial that they perceive the value that comes along with that.
The path forward
Looking ahead, the future of low-touch trading will be defined by those who can effectively combine technology with a deep understanding of client needs. It can never be a choice of one or the other.
While quick trading execution at scale is essential, there is a natural floor to the speed we can achieve. This balance is crucial; speed is important, but so is the need to engage with clients, understand their strategies, and ensure that we meet their
unique requirements.
In this evolving landscape, the firms that thrive will be those that recognise that technology is just one piece of the puzzle. The true value lies in understanding clients at a deeper level, allowing for a collaborative approach that marries speed with
strategy. By prioritising both technological innovation and personal service, firms can create a trading environment that not only meets but exceeds client expectations, ultimately fostering long-term relationships and sustained success.
As the trading environment continues to evolve, firms must remain agile, adapting to new market conditions and client demands. Continuous feedback loops with clients will be essential to refine service offerings and enhance technology. This proactive approach
ensures that firms can anticipate changes in market dynamics and client preferences, thereby positioning themselves as trusted partners in their clients' trading journeys.
By embracing this dual focus on technology and personalisation, firms can not only navigate the complexities of low-touch trading but also drive meaningful growth and innovation in the industry.