Balraj Bassi, co-founder and chief executive officer, Tradefeedr
Data analytics in financial markets has reached the point where clients have access to complete global data sets, and we see 2024 as the year where this will drive change in how counterparties interact and in automating trading workflows. Firstly, with more data freely available in data networks it will become easier for buy- and sell-side firms to interact and collaborate, using data to make decisions about who they trade with and how they execute trades most effectively and profitably. Trading data made available via APIs informs trading decision making, and trading desks are starting to automate their workflows using the information contained in the data sets.
In 2024, we to see an increased use of trading algos in FX. As the use of data increases, we also see increased demand for data networks supporting multiple asset classes. Tradefeedr’s initial focus was FX, and in response to client requests we will launch equities and futures in 2024.
David Taylor, chief executive officer, Exegy
In 2022, we conducted a survey of executives in principal trading, brokerage, and asset management firms to quantify demand for buying predictive signals and content from third-party providers (like us) as a supplement to internal development. Around 10% of firms were engaged with third-party providers, 20% were actively evaluating third-party offerings, and 40% predicted that an engagement with a third-party provider was likely in the next one to two years. This aligned with other industry analysts who projected the alternative data market to grow at over 50% CAGR over the next five years.
As the table stakes continue to rise to be competitive in electronic trading globally, firms will expand their sourcing and integration of solutions from trusted third-party experts. Increasingly, this will include AI technology, predictive signals, and components of quantitative strategies, as firms are forced to rethink the boundaries of their own expertise and drivers of their sustained alpha.
Robin Mess, chief executive officer and co-founder, big xyt
In recent years, navigating the European market has proven to be a formidable challenge, marked by growing competition, additional legislations and venues. The industry shares the hope that policymakers will transform the entire region into a more alluring investment hub, fostering consistency over internal European competition.
Propelled by innovation and technology, 2024 will witness exchanges and venue operators enhancing their appeal to market participants through the introduction of novel or revised mechanisms, whilst liquidity providers increasingly engage with buy-side firms. Asset managers are anticipated to spearhead and embrace emerging trends, particularly the rise of active ETFs along with ETF-specific execution algorithms. Across all asset classes, the significance of execution analytics, pre-trade estimations, and the automation of processes such as swing pricing will be more pronounced than ever.
As the trading industry increasingly becomes data-centric, its pivotal role in driving and implementing long-term initiatives will include actively contributing to the realisation of the consolidated tape and transitioning towards T+1 settlement. The year will also bring more clarity about use cases leveraging generative AI and digital assets.
Kamala Kannan, director, corporate actions, S&P Global Market Intelligence
Trade data between parties has always been undisclosed, with anonymity maintained throughout the trade life cycle leading to difficulties in tracking the end-to-end trade movement, eventually leading to trade matching or settlement failures. Considering recent developments around Unique Transaction Identifier (UTI) and fintech firms offering collaborating solutions, remaining undisclosed will no longer be possible, as further data sharing platforms emerge focused on marrying both sides of the transactions and provide a unified view to the final consumer.
As participants openly share their data, platforms can link entire settlement parties involved in the trade life cycle and provide end-to-end transaction visibility with the transaction status (both buy- and sell-side), discrepancy details etc., using a common reference like UTI or other trade parameters. When settlement information is shared reciprocally between counterparties, it will enable firms to identify and correct the inefficiencies at early stages of the trade and prevent failure in matching or settlement, which will be crucial in T+1 environments with shortened settlement cycles.