Building a flexible and diverse skill set on the trading desk is essential to adapting to evolving market conditions and growing at scale according to Supurna VedBrat, the global head of trading at BlackRock, during a buy-side keynote interview at this year’s TradeTech conference.
VedBrat detailed how the world’s largest asset manager is staying ahead of evolving market conditions by building a culture that ensures trading desk staff are armed with a diverse set of skills that can be utilised across its execution channels and technology resources.
“We’re not shy about picking someone with transferable skill sets and moving them into an area where they might not be a subject matter expert, but they do bring the very essential ‘softer’ skills that are now necessary in order to create a collaborative environment,” said VedBrat.
“The trader of today and tomorrow is different from the past, where traditionally they would have vertical, very deep expertise. Now, traders need to be able to understand multi asset classes, multiple trading strategies, and multi-regional, global influences.”
VedBrat explained that the idea of a trader as bring siloed in the front-, middle- or back-office is less present at the firm now, as a wider view of the entire investment process is required, as well as possessing the ability to interpret data and be fluent in their algorithm options to adapt to different market conditions.
“Alongside their execution role, they are also helping us figure out if we need to improve existing trading or if there is a better way for us to be executing,” VedBrat commented. “My traders are looking at the entire investment process, all the way through to settlement.”
This approach to building a flexible trading desk means firms can approach challenges in a more proactive way, and for a firm with global operations to such a scale, BlackRock’s starting point to this is through global consistency and standardisation.
“One thing we are mindful of is that we have a lot of regulatory change happening globally and that is creating fragmentation,” she commented. “Fragmentation sometimes leads to pools of liquidity that aren’t global in nature now becoming a little bit more regional, and you have to keep that in mind as you are thinking about how you are setting up trading workflows.
Developments in automation and data are vital tools to address liquidity issues and BlackRock’s proactive approach to these technologies has allowed the firm to engage in consistent dialogue with its market counterparties. VedBrat said that while gaps in liquidity present issues for all market participants, artificial intelligence and data science are key tools for BlackRock in going forward with these trading challenges.