facebook linkedin twitter
Friday, March 14, 2025
facebook linkedin twitter

Outlook 2025: Benjamin Schiffrin, Better Markets

By
Anna Lyudvig
-

Benjamin Schiffrin is Director of Securities Policy, Better Markets

Benjamin Schiffrin

What are your expectations for 2025?

The SEC will abandon Chair Gensler’s rulemaking agenda and instead allow the industry to continue to pursue policies that harm retail investors. So instead of a rule that requires brokers to get the best prices for their customers, brokers will continue to be able to evade any duty to seek best execution of their customers’ orders. Instead of a rule that requires broker-dealers and investment advisers to have policies and procedures regarding cybersecurity, investors will be vulnerable to cyberattacks. And instead of a rule that regulates the way broker-dealers and investment advisers use artificial intelligence, broker-dealers and investment advisers will be able to use artificial intelligence in a manner that puts their interests ahead of the interests of the investors they are supposed to serve. Essentially, the SEC will usher in an era of deregulation.

What trends are getting underway that people may not know about but will be important?

One trend is the marketing of alternative assets such as private credit to retail investors. Traditionally, the private funds industry has been unable to sell its products to retail investors because retail investors are unable to fend for themselves without the disclosure requirements that exist in the public markets. But there is now a push to sell products like private credit ETFs, which could be sold to retail investors and that would expose retail investors to private credit. Private credit funds would be composed of loans that are illiquid and hard to value, which would make them risky for retail investors.

Another trend is the push for 24/7 stock trading. New securities exchanges, such as 24X, and established securities exchanges, such as the New York Stock Exchange, both want to expand trading hours so they are open around the clock. This would allow retail investors to buy and sell stock in the middle of the night. The problem is that investors will receive worse prices for their securities trades during overnight sessions. The industry will also be able to use artificial intelligence to induce investors to trade at all hours of the day through push notifications and other behavioral prompts. Given that it is human nature to engage in riskier behaviors at night, 24/7 trading has the potential to cause investors to trade excessively and even to become addicted to trading. This concern is not theoretical, as the ability to bet on sports 24/7 is fueling a gambling addiction epidemic. And an underreported element of crypto—aside from its prevalence in frauds, scams, and abuses—is that crypto trading addiction is so prevalent due to the ability to trade crypto around the clock that there are now addiction centers that specialize in it.

What industry trends have been prominent but are now fading (or will soon fade)?

Investors have been demanding more information about the role of environmental, social, and governance (ESG) factors in their investments, and although that is unlikely to change, the efforts to get investors this information are likely to fade. The SEC is unlikely to finalize its proposed rule to require funds to disclose how they use the ESG factors. One of the purposes of the rule was to prevent greenwashing—the practice of funds promoting their use of the ESG factors in a manner inconsistent with their actual use. Any failure to provide investors with information about how funds actually use the ESG factors is shortsighted. Funds that prioritize the ESG factors will continue to exist, as will funds that misrepresent how they use the ESG factors. All the absence of a rule will do will be to leave investors in the dark and make their investment decisions harder.

Outlook 2025: Dave Choate, CAPIS

By
Anna Lyudvig
-

Dave Choate is Chief Operating Officer & Executive Director of Sales and Trading, CAPIS. 

Dave Choate

Who were the most important/influential people at your firm in 2024? 

In 2024, the most important and influential people at CAPIS were those who demonstrated exceptional leadership and vision, driving the firm’s continued growth and success. COO David Choate was also critical to the firm’s success, overseeing day-to-day operations and ensuring the seamless execution of CAPIS’ business strategy. David’s focus on operational efficiency, team collaboration, and client satisfaction helped maintain CAPIS’ competitive edge and high standards of service. 

A standout in 2024 was Chris Halverson, Director of Institutional Sales, who not only played a key role in expanding the firm’s institutional client base but also earned the prestigious STA 2024 Recipient of the Dictum Meum Pactum Award. Chris’ expertise and dedication to client relationships were fundamental in securing high-profile partnerships and driving business development initiatives at CAPIS. 

In addition, Chris Hurley, Head of CAPIS’ Outsourced Trading offering, Chad Muller, Head of Domestic Equity Trading, Dave Lee, Head of Fixed Income, and Jon Lantz, Head of Bank Trust sales, have helped to shape CAPIS’ trajectory in 2024, contributing to the firm’s continued growth and leadership within the financial services industry. 

What was the biggest financial market story of 2024? 

The biggest financial market story of 2024 revolved around the continued rise and integration of artificial intelligence (AI) technologies, particularly their impact on stock markets and industries. Companies like Nvidia, Microsoft, and others heavily involved in AI innovation experienced significant growth. The AI-driven boom in productivity and efficiency sparked debates about long-term investment opportunities and risks.  

What is a big story that you are tracking heading into 2025? 

Heading into 2025, the biggest story to watch for everyone in our industry is how the incoming administration will impact a host of issues relevant to the financial markets – its stance on regulation, energy policy, domestic spending and so much more. All we know now is that changes are coming, but the impact is not yet clear. It will be very interesting to see how it all unfolds and market participants will need to be at the ready to react for sure.   

We also have our eyes on The U.S. Supreme Court’s June 2024 decision to overturn the Chevron deference, a doctrine that had guided judicial deference to federal agencies’ interpretations of ambiguous statutes since 1984. This will have major consequences for the SEC and financial markets. The impacts on the SEC include increased judicial scrutiny – where the courts are now more likely to independently interpret statutes, reducing deference to the SEC’s expertise and increasing the likelihood of further legal challenges. This of course creates regulatory uncertainty, where the SEC may need to provide more detailed justifications for rules, which could potentially slow rulemaking. That will impact the broader financial markets by increasing compliance costs and causing more market uncertainty/decreased investor confidence, due to prolonged legal disputes.  

Outlook 2025: Sylvain Thieullent, Horizon Trading Solutions

By
Anna Lyudvig
-

Sylvain Thieullent is CEO of Horizon Trading Solutions.

Sylvain Thieullent

What were the key theme(s) for your business in 2024?

It has been a successful year for us. We have now been certified to trade on the Toronto Stock Exchange, which means Horizon clients can now trade Canadian equities and derivatives, and leverage advanced trading strategies and execution algos, on a single platform. Developing and certifying exchange connectivity is part of our business, we’ve been doing this for 25 years when clients ask for a new gateway. For a Canadian client though, partnering with a vendor without certified connectivity can be seen as risky, so we felt it instrumental to offer certified connectivity to the exchange.

What was the highlight of 2024?

The global equity sell-off in early August served as a stark reminder of the investment world’s perils, being yet another of the now frequent and severe disruptions that challenge conventional trading strategies. Many algo trading strategies need to be revamped to remain effective in an era of frequent volatility bouts. Key to standing a chance of delivering strong returns is the capability to respond to real-time data and adjust to the ebbs and flows of market conditions instantaneously. One of the critical aspects of this evolution is for algos to incorporate advanced risk features, and to source liquidity across multiple venues. In essence, algos now need to be both hunters and gatherers, constantly seeking out the best opportunities while managing the impact of their trades on the market.

Another significant development this year has been the growing awareness among market participants that their current trading technology stacks are outdated in Europe and America. In emerging markets, we are seeing an uptick in firms adopting trading technology to fit with their strategic growth ambitions. We have seen good traction in 2024, and hope to continue this into 2025.

What are your expectations for 2025?

2025 is shaping up to be a year of transition and innovation for financial markets. With a Trump presidency, it is fair to say that a lot of financial regulatory changes are completely up in the air. Right now though, the SEC has ratified changes to equity market structure including a move to reduce the tick sizes of trades. Smaller tick sizes would cause tighter spreads, which could have a knock-on impact on high frequency traders’ willingness to market-make US stocks while channelling large volumes of trading to technology firms like Robinhood. This presents an opportunity for traditional retail brokers to win back the business that they have lost over the last decade, if they are in a position to take advantage. They need to differentiate themselves and adapt to modern trading conditions, which is dependent on embracing technology, updating their internal operational processes, and ultimately creating the quality of experience that customers expect in 2025. The moves observed in the US are going to have knock on impacts on other global markets, and choosing the right tech partner to support growth will be business critical.

Further, shifting geopolitical dynamics are paving the way for new trading highways and opportunities in regional markets. For financial institutions, this evolving landscape presents both challenges and opportunities. Certain firms will embrace these changes by harnessing technology to adapt to new regulatory demands and expand into untapped markets.

What trends are getting underway that people may not know about but will be important?

With dozens of headlines circulating this year around the threat of emerging technologies automating swathes of banking roles, you could forgive colleagues on execution trading desks for feeling jittery. The unrivalled speed and precision of trading algorithms have given rise to rumours of redundancy for years. However, the role of the execution trader in modern markets is very different than it used to be. Execution management systems are more advanced, but the complexity of markets and the need for strategic decision-making is also greater. Today’s traders are shifting from being order-placers to sophisticated managers of algos, copious amounts of market data, liquidity providers to the markets and, of course, risk. We expect automation to continue to transform execution trading, and in fact increase the requirement for skilled professionals who are capable of thinking and acting strategically.

Outlook 2025: Linda Middleditch, Regnology

By
Anna Lyudvig
-

Linda Middleditch is Chief Product Officer, Regnology.

Linda Middleditch

What was Regnology’s biggest accomplishment in 2024?

In 2024, Regnology launched its RGD (Regnology Granular Data), an integrated global data model designed to enhance regulatory reporting. RGD offers a harmonized, standardized approach to manage a bank’s entire dataset, facilitating prudential, statistical, and ad-hoc reporting at both supranational and national levels. By minimizing data provisioning efforts and ensuring consistency across various reporting areas and jurisdictions, RGD serves as the core of all Regnology solutions.

Designed specifically to meet emerging regulatory requirements such as IReF, and the full spectrum of financial regulatory reporting needs, RGD is revolutionizing the way institutions handle compliance. RGD eliminates redundancy by centralizing and streamlining data reporting processes. Its cloud-based infrastructure leverages AI-powered analytics and pattern recognition, enabling faster regulatory compliance and delivering significant cost savings.

Throughout 2024, Regnology leveraged the cloud and AI to enhance its comprehensive suite of regulatory reporting solutions. To close out the year, Regnology positioned itself for further growth with the acquisition of VERMEG’s regulatory reporting business, marking its eighth strategic acquisition and solidifying its position as a global leader in end-to-end regulatory reporting solutions.

What was the biggest story of 2024?

In 2024, several key trends emerged in the regulatory reporting landscape. First, as the theme of this year’s RegTech Convention, “TechReg – The Power to Transform”, we have seen the transformative potential of technology in regulatory reporting space and how the advancements in AI, hyperscale cloud technologies, and data governance can shift regulatory reporting from a reactive to a proactive approach. We have also seen that financial regulators globally have increased their emphasis on granular data reporting. All regulators either already have a granular data program in place or will have one imminently. Major initiatives like IReF in Europe, and similar programs in the UK, Canada, and Hong Kong, are leading the way. This trend is not limited to these regions; all regulators are moving towards granular data collection. The reason is clear: it provides regulators with more flexibility and the raw data needed to analyze situations as they arise, making it a logical and beneficial approach on many levels.

What do you anticipate will be the “big story” of 2025? What is a trend that too few people are paying attention to?

Regulatory data quality and standardization require greater attention. Many firms still have significant work to do, as clean data is essential for granular data collection and BCBS 239 compliance. Some firms are realizing the need to start data cleanup and adapt workflows in 2025 to meet upcoming deadlines. The delay in IReF does not stall this effort. The benefits of this include significant cost reductions. We are already seeing fines for data quality issues in reporting, with more expected. Banks must be prepared. Additionally, regulatory reporting in the US may undergo reviews and changes following the government transition.

Outlook 2025: Mark Walsh, Milestone Group

By
Anna Lyudvig
-

Mark Walsh is Head of Milestone Group, a provider of automation technology for the investment industry.

Mark Walsh

Looking back, what do you think 2024 will be remembered for from a fund management perspective?

2024 was the year of consolidation, focusing on investment specialization (a tale of the ramping up of Alternatives, such as Private Credit strategies and active ETFs) and a focus on how firms can enable these investment strategies using core competencies, technology and platforms, alongside their specialized partners and centres of expertise.

A year to focus on what “resilience” means to firms and their investors – macroeconomic environments have proven to be unpredictable, inflation is still high, coupled with interest rates.

Cyber is still a sharp focus for many, as the pace of keeping up with investing into cyber security, coupled with the rate of potential tech-based failure (think Crowdstrike) and contagion these events can have on a globally connected financial market.

A year of Gen AI use cases – but the “rubber hasn’t hit the road yet” – but it will and when it does it will accelerate the rate of growth, progress and drive investment outcomes exponentially, and also see a realignment of the labor market.

Looking forward, what do you see being the major challenge(s) that your clients/prospective clients will face in 2025?

What makes a resilient business – and knowing that you have the building blocks to encounter shocks and unpredictability in the market and environment.

It’s also about curbing costs and seeking value for money as you think about how to keep up with the pace of technological change and innovation. Value for money and cost transparency is also a key theme going into 2025, with increased scrutiny being placed on costs by the regulators. As a result, investors will be especially focused on achieving clarity around the true costs of investing in AI and its on-going use.

The role of market infrastructure will be key, and the robustness, transparency of the players that are in this space (Central Banks, Clearing Houses, Stock Exchanges, Banks etc).

Government and politically driven change and shift in policies, driven by a change in voter sentiment across the globe in a post pandemic environment across multiple countries will impact the way the funds management industry will respond to new Governments, Public Policy and public opinion (a lot of major markets have already helped elections or are due to next year).

With tighter regulations on fair valuation and ongoing reliance on manual processes, asset managers face rising compliance burdens. What do they need to do in order to get ahead of this challenge?

Many firms still rely on disparate systems, spreadsheets, and manual processes, making compliance with regulations like Rule 2a-5 challenging. Innovative fair value technology offers fund managers a chance to streamline this complexity by enhancing efficiency, automating processes, and providing detailed audit trails. This transition not only alleviates the workload on staff responsible for overseeing securities valuations and reporting but also significantly reduces the risk of errors.

Outlook 2025: Dan Reid, Xceptor

By
Anna Lyudvig
-

Dan Reid is Founder and CTO of Xceptor, a provider of data automation software.

Dan Reid

What was the highlight of 2024?

A major highlight of 2024 was the evolution of AI adoption. As the hype surrounding AI as a universal problem-solver cooled, capital markets firms moved toward a more grounded and pragmatic approach. In doing so, firms targeted AI efforts on specific challenges with measurable impact and outcomes. For example, AI played an increasingly transformative role in processing unstructured data, which has long frustrated the financial services industry.

Also notable was the democratization of AI, made possible with tools like generative AI (GenAI) powered by large language models (LLMs). GenAI became accessible to non-technical operations teams, empowering them to streamline workflows and independently solve complex problems with little reliance on data science expertise. As AI became embedded across daily operations, firms enhanced efficiency and established a foundation for more integrated and practical technology use.

What surprised you in 2024?

In the lead up to T+1 settlement in North America in May 2024, there was considerable nervousness amongst industry players, and thus, it was a pleasant surprise for many that the transition went smoothly, owing to the extensive preparation by market participants. Importantly, the transition underscored the need for optimized organizational agility. Leaders recognized the pressing need to empower operations teams with technologies to control their processes and respond swiftly to regulatory changes. As a result, they have elevated the importance of adopting automation, not only to ease T+1 transition, but also develop adaptable operational models that can accommodate changes in global finance.

Another unexpected development was the rapid speed at which emerging technologies such as vector databases and retrieval-augmented generation (RAG) were adopted. These innovative solutions leverage advanced AI models to enhance knowledge bases, compliance, and document verification processes. Initially limited in scope, they quickly gained traction due to their potential to improve accuracy and relevance in high-stakes decision-making.

What are your expectations for 2025?

In 2025, I expect data automation and AI to drive even deeper transformations across capital markets. Firms will continue to integrate AI into broader operational processes, creating opportunities to optimize workflows, improve risk management, and enhance customer interactions.

A key focus will be unlocking new sources of value from unstructured and alternative data, such as social media sentiment and nontraditional credit metrics, to inform more nuanced decision-making. As firms develop adaptable systems to meet evolving compliance requirements, regulatory agility will become an imperative, supported by tools that trace data origins and offer real-time updates to ensure transparency and efficiency. Additionally, I anticipate a heightened emphasis on human-AI collaboration, with automation augmenting rather than replacing human roles, allowing teams to concentrate on strategic innovation and long-term growth.

The firms that excel in 2025 will be those that prioritize adaptability, efficiency, and client-centric strategies while leveraging cutting-edge tools to redefine operational excellence.

Outlook 2025: Stamo Hadjiyski, Capital Markets Gateway

By
Anna Lyudvig
-

Stamo Hadjiyski is Co-Founder, Capital Markets Gateway (CMG).

Stamo Hadjiyski

What were the key theme(s) for your business in 2024?

Capital Markets Gateway (CMG) provides ECM data and workflow solutions for sell-side and buy-side firms. Our unique position serving underwriters and institutional investors enables us to deliver comprehensive solutions for the new issue market.

As market participants invest in capital markets technology, CMG has stayed ahead with innovative new products and strategic leadership additions in 2024. Most notably, RBC joined CMG’s global underwriter network as both a client and investor, and we appointed industry veteran Carlos Hernandez to our board of directors to add another experienced and insightful voice to company leadership.

In terms of broader ECM industry trends, a key theme in 2024 was the resurgence of IPO activity and improved market conditions, marking a shift toward recovery and renewed confidence. Throughout the year, we observed steady growth in both the number of companies going public and the capital raised, signaling healthier market dynamics compared to the previous two years.

A notable trend was the improvement in IPO pricing conditions against a more favorable demand backdrop. It reflects the increasing investor appetite for new opportunities and better alignment between company valuations and market sentiment. As a result, 2024 has been a transitional year—a story of steady rebuilding and preparation for future growth—quietly laying the groundwork for what could be a more robust and active IPO environment in the near future.

What was the highlight of 2024?

The highlight of 2024 has been improving IPO pricing conditions, on course for a breakout 2025 for overall activity. In addition, we have seen yearly declines in the percentage of IPOs pricing below the range, while a larger portion of IPOs have priced above range.

Average trading performance has also trended favorably (day 1, day 30 and current) for IPOs and 2024 saw increases in Cornerstone investments, in terms of both activity and capital raised.

Note that for this analysis, we have examined all IPOs (excluding SPACs) with gross proceeds over $50M.

Recent IPO Volume (2022-2024):

· 2024: 69 IPOs raising $32.7B

· 2023: 34 IPOs raising $20.5B

· 2022: 21 IPOs raising $7.6B

Key Takeaway: Strong growth as 2024 exceeded the prior two years combined, in both number and dollar volume, with increases in every quarter compared to 2023, signifying a healthy market throughout the year.

Percentage of IPOs Pricing Below Range:

· 2024: 18.84%

· 2023: 26.47%

· 2022: 28.57%

Percentage of IPOs Pricing Above Range:

· 2024: 20.29%

· 2023: 17.65%

· 2022: 4.76%

Trading Performance (Dollar-Weighted):

· Day 1: +15.15%

· Day 30: +19.33%

· Offer to Current: +43.27% (as of 12/17)

Cornerstone Investments:

· 2024: 21 IPOs ($3.4B volume)

· 2023: 13 IPOs ($2.5B volume)

· 2022: 5 IPOs ($669M volume)

What are your expectations for 2025?

We anticipate the IPO window will fully reopen next year. While a return to 2021’s peak activity is unlikely, more normalized 2019-level volumes are expected as pricing and performance trends improve.

Note that for this analysis, we have examined all IPOs (excluding SPACs) with gross proceeds over $50M.

Benchmarking to Peak IPO Activity (2019-2021):

· 2021: 319 IPOs raising $154.7B

· 2020: 186 IPOs raising $86.6B

· 2019: 134 IPOs raising $50.8B

Notable rumored IPOs for 2025 include Chime, Databricks, Discord, Hinge Health, Klarna, MNTN, Plaid, Skims, Solera, and StubHub.

Outlook 2025: Lisa B. Saacks, Trillium Surveyor

By
Anna Lyudvig
-

Lisa B. Saacks is President, Trillium Surveyor.

Lisa B. Saacks

What were the key theme(s) for your business in 2024? 

The key theme for our business in 2024 was navigating the complexities of evolving market conditions to ensure traders operated in a fair, transparent, and efficient environment. 

The expansion of overnight trading presented unique challenges, particularly around managing risks associated with low liquidity and potential market disruptions. For traders, this underscored the importance of maintaining dynamic and adaptable surveillance thresholds to keep pace with the rapidly shifting market landscape. 

Another critical focus was addressing the risks posed by low-price, low-volume securities, which drew heightened regulatory scrutiny due to their vulnerability to manipulative schemes like pump-and-dump tactics. With a notable increase in enforcement actions against firms failing to monitor trading in these securities, the need for robust, proactive trade surveillance became a top priority for ensuring compliance and maintaining market integrity. 

More broadly, the regulatory environment has evolved across asset classes, and we received more questions than ever on how our trade surveillance and reporting solutions can elevate the capabilities of internal compliance teams. With comprehensive detection filters, full depth-of-book market data, and new self-service features, the Surveyor platform offers a robust set of tools for effective risk mitigation. In addition to ensuring their compliance, these capabilities enabled our clients to adopt new asset classes and strategies with minimal disruption to existing compliance workflows. 

What was the highlight of 2024? 

The SEC’s adoption of amendments to Rule 605 of Regulation NMS in March was an important regulatory action this year. This update was aimed at enhancing transparency in order execution for NMS stocks, effective as of June 14, 2024, and with a compliance deadline of December 14, 2025. 

The amendments brought significant updates, including the expansion of reporting requirements to include broker-dealers managing 100,000 or more customer accounts. This broadens the scope of entities responsible for disclosing execution quality. Additionally, the definition of “covered orders” was revised to encompass orders submitted outside regular trading hours, those with stop prices, and non-exempt short sale orders, ensuring more comprehensive reporting. 

The amendments also introduced order categorization based on notional dollar value and order type — fractional shares, odd lots, or round lots — enhancing the accuracy of order size representation. Moreover, new execution quality metrics, such as average effective over quoted spread and size improvement statistics, were introduced to provide deeper insights into execution quality. 

Finally, the new requirement for firms to provide publicly accessible summary reports on execution quality is another move toward greater transparency, empowering investors to make informed comparisons.  

What are your expectations for 2025? 

We anticipate that heading into 2025, the crypto market is poised to be a high-volume, high-volatility environment. To enable traders to operate effectively in this dynamic space, robust trade surveillance is essential. We’ve recently partnered with Kaiko, which provides high-quality crypto market data. Additionally, the expansion of our coverage in Europe reflects our dedication to providing comprehensive tools that address the unique needs of both traders and investors.  

Similarly, we’ve observed a growing regulatory focus on non-equity asset classes, particularly fixed income, prompting us to prioritize enhancements to our surveillance capabilities in these markets. Other areas of focus include expanding our best execution offerings and providing targeted support for RIAs and buyside firms—two groups that are navigating heightened regulatory scrutiny and an increasingly complex trading environment.  

Within the wider regulatory landscape, we foresee changes poised to deeply influence market participants, with a particular emphasis on enhancing oversight and addressing the challenges of dynamic and evolving work environments. Additionally, FINRA’s proposed fee increases for broker-dealers, scheduled to phase in over five years starting in 2025 through 2029. While most changes will take effect in 2026, the initiative underscores FINRA’s commitment to enhancing its regulatory and oversight capabilities by securing additional financial resources.  

Outlook 2025: Bianca Gould, BNY

By
Anna Lyudvig
-

Bianca Gould is Head of Fixed Income & Equities EMEA at BNY.

Bianca Gould

What was the highlight of 2024?

BNY launched its EU trading desk in Dublin in October to support the execution of trades for EU-based clients across global fixed income and equity markets. This was a direct response to growing demand from our EU-based clients for integrated execution services and broadens our client reach as a result. Our focus remains on enhancing our global execution offering, and this was a critical step for us as we push forward to execute on our international strategy and scale outside of the US.

What are your customer’s pain points and how have they changed from 1 year ago?

Continued consolidation within the industry has increased clients’ focus on operational efficiencies in the last year. Clients are looking to reduce the overall number of partnerships they need to maintain. Our multi-asset execution offering, with an execution-to-custody proposition and middle office support, is well-positioned to solve for many of our clients’ pain points across the trade lifecycle by utilising our trade execution solutions.

What were the key theme(s) for your business in 2024?

Aligning our capabilities with client requirements has been a key priority throughout the year. This has required innovation, automation and scale. By launching our EU trading desk in Dublin, we responded to EU-based client demand and have better aligned the global multi-asset trade execution offering with our partners across BNY. Our Execution Services Platform allows us to offer trading solutions from the traditional end of the scale within Global Markets Trading, right through to full outsourcing via our separate Buy-Side Trading Solutions group.

Outlook 2025: Matt Barrett, Adaptive

By
Anna Lyudvig
-

Matt Barrett is CEO and co-founder at Adaptive.

Matt Barrett

What were the key theme(s) for your business in 2024?

2024 was a pivotal year for trading technology. Over the past decade, we have seen major breakthroughs and innovations paving the way for new capabilities across asset classes, benefiting participants throughout the capital markets ecosystem. Despite this progress, the past 12 months have marked a distinct gear shift as advances in cloud technology, adoption of open source and sophisticated tech accelerators have converged – offering firms of all shapes and sizes new ways enhancing their technology stacks.

As a result, proprietary trading technology has become increasingly accessible. Historically, only the larger financial services firms with big budgets would build bespoke technology. For others, the primary route was via vendor technology – sometimes bolting disparate systems and functionalities over time. Over the past year, this choice has become less clear-cut.

The convergence of resilient, low-latency cloud-based technologies has meant that technology stacks can be quickly built and deployed. Formerly lengthy and disruptive build time is no more –. As a result, we have seen an increasing number of sophisticated firms of all sizes exploring custom solutions to address their trading challenges, differentiate and innovate at pace.

As the concept of firms building their own technology normalises, we can expect this trend to continue into 2025.

What are your expectations for 2025?

2025 could be the year when technological innovation across asset classes takes off. As proprietary technology becomes an increasingly viable option, a growing number of firms are taking innovation into their own hands.

Vendors have played an important role in helping firms to keep pace technologically. However, now that an increasing number of firms are able to build state-of-the-art systems tailored specifically to their and their client needs, the pace of innovation is no longer dictated by third parties. Trading systems do not have to cater for the majority, meaning that firms can start to think outside the box about how to differentiate and how to best serve their clients.

As a result, we can expect to see an increasing number of financial services firms streamlining their technology stacks and doing away with tangled and disparate systems in a drive for greater operational efficiencies. We can also expect increasing interest in multi-asset systems that simplify workflows, improve decision making and enhance user experience.

2025 will be about laying the foundations for future technology adoption. Across the buy and sell-side, from the front to the back-office, firms will be eyeing up the competition and thinking seriously about whether their current technology stack is right; exploring how to harness AI, 24/7 trading,new or emerging asset classes, particularly in the context of soaring digital assets, firms of all shapes and sizes will be looking at the work required in the next 12 months that will enable them to thrive in the long-term.

What are your customer’s pain points and how have they changed from 1 year ago?

A huge amount has happened in 2024. From persistent inflation humming in the background, to debate over rate cuts to the August sell-off and highly consequential elections, it has been a year characterised by uncertainty.

At the start of the year, the focus for many was on navigating a complex trading environment. As the year has progressed, the clouds have slowly lifted and the outlook for 2025 appears much clearer. This not only means planning their technology expansion but looking at how to streamline operational efficiencies in order to reduce costs and better deploy resources.

We have also seen an increasing focus on resiliency. High-profile outages and thethreat of cyber-attacks have focussed the minds of the firms responsible for trading billions of dollars in assets on a daily basis. Mitigating against potential threats – whether business interruption or worse – has become a growing priority.

A combination of these factors has increased the onus on the quality and capacity of firms’ technology to address operational pain points. While planning a trading technology strategy is a challenge, the potential for transformation, greater technological choice and increasing ease of implementation makes enhancing trading systems more of an opportunity than a pain point.

1...202122...2,164Page 21 of 2,164

MOST READ

✕

SUBSCRIBE FOR TRADERS MAGAZINE EMAIL UPDATES

[activecampaign form=12]