Trading Reimagined is a content series that examines how the transformative power of technology is prompting a reimagining of the markets. Trading Reimagined is sponsored by Exegy.
Trading and investing firms’ historical, binary choice of whether to buy or build trading technology began to blur as far back as two decades ago, when vendors developed and promoted customizable systems.
Momentum for hybrid technology suites has accelerated more recently, driven by demand and marketplace affirmation that combining buy and build provides the most capabilities and cost efficiency.
Coalition Greenwich highlighted “Buy, Build and Integrate” as one of its Top Market Structure Trends to Watch in 2024.
The approach “has gained traction as both buy- and sell-side firms combine pre-built platforms with proprietary technology systems,” the consultancy wrote. “Even larger firms that have often built their own fully proprietary systems are increasingly considering integrating specialized third-party platforms due to their cost-effectiveness and functionality.”
“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 continued. “It grants firms greater control, flexibility and adaptability while reducing development time and costs. However, customization and development efforts require resources, expertise and collaboration with vendors.”
Coalition Greenwich emphasized that tech vendors need to offer more than just the right technology to establish and sustain a partnership with broker-dealers and investment managers.
“Factors such as integration ease and reliability of these hybrid systems are gaining more importance, while successful providers prioritize ease-of-use, scalability, customization, comprehensive training, and high-quality support,” the report said. “Collaboration and customer-focused approaches will continue to be essential for building long-term relationships and unlocking growth opportunities.”
