London, 19 February 2013 – A new report from Aite Group outlines the current post-trade communication process and the need for technological change in trade allocation, confirmation, and affirmation. Based on Aite Group interviews with institutional brokers and asset managers across the globe, the report also highlights the common factors driving and inhibiting investment in this function, including changing regulations and migrating providers. The piece is the first in a series of three reports devoted to the world of institutional trade support, including investment in electronic trade verification processes.
Institutional trade support technology is currently witnessing a classic Wild West standoff between top-tier asset managers, large brokerages, and smaller asset management firms. Increasing pressure to reduce operating costs, move beyond support for cash equities, and respond to regulatory and infrastructure changes has placed all three parties in dire need of new technology, but no single party wants to choose first and risk missing the mark. The first to invest could be at a tactical disadvantage, but truly necessary technology implementation will remain tumbleweed-silent until someone takes the lead in this new frontier. Who will draw first?
“Revenue is down, cost is up, and firms need to prepare themselves for new electronic processes in previously manual, bilateral markets,” says Virginie O'Shea, analyst with Aite Group and author of this report. “Omgeo has long been dominant in the electronic trade verification space, but a number of top-tier asset management firms have begun pushing in other directions and the wider market is waiting to see whether the chosen technology can achieve critical mass and make the investment worthwhile.”
This 25-page Impact Report contains 12 figures and one table. Clients of Aite Group’s Institutional Securities & Investments service can download the report.