ELS panel assesses the challenge in deriving the most value from the intelligence of the trading desk.
Data is more critical than ever for institutional trading desks, and it’s becoming more powerful and more real-time. But market participants need to carefully map out their data journey to optimize results.
Those were the high-level takeaways from the Fireside Chat: Implementing an Innovative Data Strategy to Leverage Efficiency, Improve Execution, and Extract New Alpha, which took place Tuesday morning at WBR’s Equity Leaders Summit in Miami.
Hariharan Srinivasan, Enterprise Data Engineering and Analytics Director at Franklin Templeton said data providers are working to make data available as quickly as possible, aided by emerging technologies such as cloud and artificial intelligence. The end goal is to enable traders to make the most informed and intelligent decisions.
Nitin Gambhir, Founder and CEO at Tethys Technology, noted that end-to-end data management and utilization entails determining what data to collect, how to collect it, how to and make it accessible, all of which requires specialized tools and skill sets.
Enrico Cacciatore, Senior Quantitative Trader, Head of Market Structure & Trading Analytics at Voya Investment Management, said data is the intelligence of the trading desk, and the future will be about data innovation and creating more interconnectivity of data.
Collaboration and partnerships were recurring themes of the panel, on the premise that data is a massive, mission-critical challenge that no one firm can meet on its own.
Gambhir said the buy side is becoming more empowered with regard to data, in terms of how investment managers are able to inform their brokers of specific needs for an order or strategy, and in turn how brokers can take that into account and provide tailored execution.
“I don’t think it’s the buy side taking more control, rather I think it’s the buy side taking a more collaborative effort with the sell side and with venues,” Cacciatore said. “Data powers a more transparent, collaborative environment, using a quantitative approach to best execution.”
To the question of how smaller-budget trading and investing firms can compete on data, panellists stressed the necessity of partnerships. “Even the biggest shops are not going to do all this themselves,” Gambhir said, adding that the key part to access via partnerships is the human expertise and intellectual horsepower.
The panel concluded with a bottom-line question: what should industry participants do to improve their data collection, utilization and management?
Cacciatore said: “Identify what you are trying to build, what data is important to you, and how to access it efficiently. Then find a partner to build the right infrastructure.”
Srinivasan suggested a two-pronged approach. “One, get away from data silos. Bring it to a centralized platform,” he said. “Two collaborate. At the end of the day that’s what is in the best interest of the investor client.”
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