Matt Barrett is CEO and co-founder at Adaptive.
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.
