What awaits us in the next 12 months? Financial data and analytics firm Coalition Greenwich made an educated guess in one of its latest publications. Titled “Top Market Structure Trends to Watch in 2024”, the article lined out 10 predictions for the year ahead. Although rather US-centric, a few points are likely to resonate with European audiences – including the ones about workflow automation, shortening of settlement cycles, and the “buy, build and integrate” approach to technology systems.
Describing the progress made in electronic trading over the past decade as “impressive”, but mostly focused on the front office, the article claimed that this is changing and shifting to the middle and back offices. “Post-trade workflow automation is not simply tactical compliance, it is also a recognition that operational automation can support profit growth,” it wrote.
Faster isn’t always better
“Today’s technology makes many things possible that aren’t a good idea, and T+0 – at least for now – is one of them,” the article criticised. Yet, the upcoming move to T+1 in the US “has already ignited discussions about the feasibility of shortening the cycle even further to same-day settlement”. In a study by Coalition Greenwich published in November last year, less than a third of participants believed that market players would be ready for T+1 by the go live date. The report pointed out that “T+0 would represent a more radical transformation with far-reaching implications and potential unintended consequences”.
Coalition Greenwich claimed ongoing research has shown that the “buy, build and integrate” approach – where firms combine specialised, pre-built platforms by third parties with their own proprietary technology systems – is gaining traction. “This approach provides a middle ground, leveraging a pre-built foundation that can be expanded and tailored through
additional development or integration with internal systems,” the report wrote. Providers that succeed under this model are those that can offer ease of use, scalability, customisation, comprehensive training, and high quality support.