Gresham Technologies: TradingTech puts complexity, digital and regulation at the forefront of its concerns

After two years of restrictions, it was great to return to in-person events at last week’s TradingTech Summit in London. While virtual catch-ups and conferences have served us well throughout the pandemic and will no doubt continue to have their place, there is no substitute for listening to the latest industry news and developments in a room full of your peers.

And there was certainly a lot to discuss. The pandemic may have grabbed the headlines, but the industry has not stood still during this time. With bigger challenges than ever ahead, we noticed three key themes emerge.

Complexityremains a key axiom as the industry struggles to rein in environments and businesses that at times can feel spiraling out of control. But complexity isn’t the cause of it – it’s a symptom of underinvestment, ignoring operational issues because they’re hard to solve, and relying on systems and processes that aren’t suitable for the purpose. It is undeniable that trading is a complex activity. But companies should face these complex issues and fight them when the nature of the business really demands it, rather than being the default, says BAU, some companies hide behind when challenged in operational efficiency and performance.

Where complexity undoubtedly increases is in the wider external environment. Businesses must contend with new approaches to hybrid working, unpredictable market events, and pressure to adapt and take advantage of new technological developments that are changing at a rapid pace.

The second key theme is this digital pace of changewhich is actually transforming our industry before our eyes, with digital asset trading at the forefront and technologies such as blockchain increasingly becoming part of mainstream projects. Like many other industries, commercial enterprises are under pressure to take advantage of these developments for both top line and bottom line benefits. Digital transformation efforts focus not only on product development and customer-facing initiatives, but also on optimizing and digitizing back-end processes and data, which is essential when a messy network of legacy systems has built up over time, contributing to excessive complexity. .

Automating these operations not only allows for smoother business operations and a better customer experience, but it also allows internal technology teams to focus on value-added transformation projects rather than dealing with yet another outage. back office.

And finally, let’s not forget the evolving regulatory environment. Just as commercial companies are increasingly focused on the digital space, so are their regulators. Companies that trade digital assets, including cryptocurrencies, are bracing for increased scrutiny as the SEC and other regulatory bodies make it clear that digital assets are high on their agenda. Regulators are also paying much more attention to company submissions under exchange reporting regimes such as EMIR, MiFID, FINRA TRACE and CAT.

While these reporting requirements are well-integrated into company processes, regulators’ scrutiny of the data underlying submissions means that companies will need to improve the quality of their data as well as the processes they use to manage and submit them. Again, digitization is key to automating processes to achieve the speed and accuracy demanded by regulators and protecting reporting companies from punitive fines and reputational damage.

Complexity, digitization and regulations will become increasingly difficult to manage as legacy processes remain in place. Now is the time for companies to carefully assess their technology infrastructure and core competencies, and identify gaps to fill and opportunities to explore.

Sharon D. Cole