The Future of Trader Communications

tokyo trading floor

Trader Voice is a significant, niche sector that is managed by dedicated teams within trading organizations. The optimum solution of the future is more flexible, less hardware-centric and more focused on workflows and functionality. We explain why the siloes need to come together and the scope of your Trader Voice strategy has to expand to achieve flexible, compliant high performance.

Trading Floor Collaboration

There was a time when turrets (aka dealer boards) were the centers of collaboration on the Trading Floor, bringing together private wires, direct dials and open channels in an unprecedented way. Now the turret is just one communication asset among a range of competing channels and applications. This doesn’t mean the turret is dead yet, but it can’t provide traders with everything they need in today’s multichannel trading environment. When planning next-generation trading communications strategy, no device, channel or application can be treated as a separate topic. In the same way that these services need to be integrated, the teams that design the future ecosystems need to cover multiple specialisms too, and this still needs to include Trader Voice insight.

Evolution of Trading Workflows

As various asset classes are pulled into the realm of high-frequency trading, the use case for trading turrets becomes more relevant to complex and bespoke asset classes where multiple counterparties and experts need to talk regularly before deals are closed. The days of traders frenetically transacting business with two handsets to their ears are gone. The workflow leading up to and beyond a transaction has become more multichannel in nature, with an emphasis on high-involvement pre-sales rather than simple transactions, so the technology ecosystem needs to be integrated to support it. A McKinsey report from 2015 found that front office staff were spending no more than 35% of their time in contact with clients and up to 17% on basic admin. Imagine the impact that streamlining these workflows would have. In early 2021 we don’t believe the situation has changed significantly but we are seeing future-focused banks who want to achieve a new standard of solution that will help them not only to be more efficient but to attract the best talent.

Application is King

We work in an age where the application is king. The transition started with the advent of the smartphone, but the switch has been heavily catalyzed by the pandemic. Trading staff found themselves working in various locations, a few stayed on sparsely populated trading floors, but most have spent at least some time working remotely with limited capacity, reduced lines and only a single speaker channel. They have had to adopt new apps to communicate and, despite the lower capacity, they have experienced levels of functionality and integration that they are not used to seeing in a Trader Voice environment. This exposure shifts expectations. In recent years we have already seen that traders are more concerned about their Bloomberg and Symphony access than turrets on Go-Live days. Each new influx of traders is more tech-savvy and far more interested in apps than equipment. The hardware is becoming less important so the mindset of technologists supporting traders needs to align with this.

A New Balance

In the aftermath of the pandemic, we will see work routines changing permanently as people see the advantage in redesigning working lives. Once again, an existing trend has been accelerated. Only last week, French giant Societe Generale announced that all workers would be able to work from home for at least some of the week.

In trading communications, this means that some of the apps which arrived during lockdown will be here to stay. Soft clients and other trading communications applications that used to be “because we can” add-ons to traditional turret offerings will achieve credibility in Wholesale Finance. Rather than designing everything around a 6-screen, dual-PC, multi-speaker trading floor workstation, banks will think seriously about what is possible and or necessary when working at a DR facility, at home or in a mobile-enabled setting. It is not one size fits all. The best employees will be adaptable and there needs to be flexibility built into their communications ecosystem. The planning of future environments will not focus on hardware but on workflows and functionality  – and the applications, integrations and infrastructure required to support them.

Compliance

This kind of futurist thinking with talk of mobile apps and remote working will raise alarm bells with compliance professionals but then the level of compliance associated with traditional trader voice set ups is far from perfect. Traditionally, banks have purchased expensive bolt-ons to perform compliance tasks and they generally perform below expected levels. On occasion, we have worked with banks who identified the gap between expectation and reality and we were able to engineer compliant solutions using the off the peg system as a starting point. However, a demonstrably compliant voice recorder still can’t overcome an array of compliance threats posed by factors, most of which involve either proximity to other desks, audible intercoms and hoots, or deliberate unethical behavior. While there are genuine vulnerabilities posed by remote working, the order of threat may not be increased that dramatically when the full risk register is considered. If every channel in the communications ecosystem were to be integrated with something like a CRM (already part of the trading workflow) rather than having some of them integrated with a telephone, then it would be far more watertight. Strategic planning should target an ecosystem that has wraparound compliance and security factored in from the outset.

Data Management

Compliance becomes an important aspect of wider data management and strategic activity. By starting with user workflows, we can obtain a clear picture of how people work and the data that is generated at each touchpoint. With every system churning information into corporate data-lakes there is competitive advantage to be found if the integrity and location of data can be precisely managed for analysis.

In a trading context, the voice, compliance, CRM, order management and trade execution systems all generate structured data while email, IM, SMS, video conferencing, social media and voice recordings produce unstructured data that presents a greater analytical challenge. Strong data governance protects the integrity of source data while a normalized transcript is pooled in the data lake. When strategizing future ecosystems, banks need to consider the ease with which systems and applications can be integrated to provide an optimum user experience across multiple working scenarios. They will also want to achieve a high level of normalized data to be analyzed for insight and intelligence. This analysis can be used to streamline processes, achieve end-to-end compliance across workflows, identify strategic opportunities and inform future selection processes.

The Secret to Success

We consistently find that by consulting with traders and analyzing data from multiple systems, we can challenge the beliefs and assumptions of users and managers alike, and the outcomes are to their benefit. We learn about how people work, the things that hold them up and the features that would help them. Now that optimum solutions have become more complex it is more important than ever to challenge silo mentalities. With full market visibility, we present multiple stakeholders with an empowering vision of what is possible and avoid uninspired replacement programs that miss opportunities. It is still our mission to provide best in class solutions through data analysis, strategic selection and precise integration. The difference is that software and apps have superseded hardware and devices. Fixed locations may not have completely given way to flexible working, but it has to be part of any successful solution. While some companies drive proactively for this kind of approach, we believe that any organization can realign itself to successfully redesign its communications portfolio. In reality, it is still the standard strategic outlook of; Where are we (really) now? Where is it possible to go? And, how do we get there?

Downloads