By Neil Gray, Vice President, Enhanced Services, IPC
Classical, jazz or techno. Creating a new song or piece of music hasn’t changed much over the years. But what has changed is how music is produced and delivered. Vinyl to tape to digital. Record players to boom boxes to iPods and iPhones. I suppose much the same can be said about trade execution, too.
A new song is still started by an individual’s idea, and then enhanced through collaboration with trusted colleagues – usually voice discussions on what lyric changes or melodies could make it better. But when it comes to recording and distribution, new technologies make the process faster, better, less expensive and enabled from and to all corners of the globe – almost instantaneously.
New technologies have also dramatically changed trading and trading communications. And looking forward, driven by the need for more efficient information flow and ever-greater productivity, we can pretty much count on more change leading to:
- Smaller systems – perhaps virtualized, available 100-percent of the time. Equipment for trading communications systems used to fill entire rooms – sometimes even floors – of banks and trading firms. Today, it’s just a soft switch – usually compact and energy efficient.
- Improved end user productivity and accessibility – through a proliferation of custom applications, intelligent interworking and other systems. Sales people, traders, their support teams and their capital markets counterparties will trade at anytime from anywhere with the utmost in capabilities, reliability and speed. Getting intellectual capital on line to close a deal anytime, anywhere is competitive advantage.
- Less human capital to manage and configure – sophisticated software and communication tools will continue to reduce the number of people required to effectively implement, maintain and monitor trading communications networks and systems. The ability to manage and make changes remotely or to make global changes from a central location is a huge savings in costs, time and resources. Taking advantage of self-service/self-provisioning tools and customer portals means tasks that required 40 people or more, now only need a handful or less.
- Real-time compliance oversight – with policy engines determining who can talk to whom, about what, and when. Today’s business intelligence can manage the more complex requirements and increasing number of variables/requirements of who and how and when any member of a trading organization can communicate with customers and counterparties throughout the capital markets while maintaining Chinese walls, highlighting conflicts of interests or flagging front running.
These technology advances will be interesting and exciting, but it all brings us back to music and the one thing that won’t change: Voice and the need for it. As new ideas develop for innovative financial instruments or enterprising trades, like creating a new song, voice is needed to communicate and collaborate. Only voice can convey the emotion, empathy and sentiments that are part of every trade. Human interaction will continue to drive markets, increase trust and enhance relationships.
As new technologies develop and accelerate the pace of change, both trading floor to back office and capital markets connectivity for voice communications becomes ever more critical. Like the music industry, we will continue to do much of what we do even faster, better, more electronically. But neither industry will be doing much of anything without the continuation of voice.
