New technology is like crack. As a geek, I gobble up every piece of news about new technology especially those geegaws that will save me time but eventually turn into a total time-suck. (I'm looking at you iPad and Facebook and Twitter and …) If you want hits to your website just throw up a story with the following headline, "Inside Apple's New iPhone" and watch the page views soar.
With every new piece of technology comes a decision: Now or Later. The debate of Buy vs. Build is over for the Buy Side - they buy stocks and most of their technology because building is for the sell side and tech vendors. Why build an order routing system when you can build your next hot algo?
I recently spoke with one fund manager who is still waiting out the cloud debate. Even though cloud data storage is a commodity these days he would rather have his data inhouse than residing who-knows-where and subject to a hack attack or a human accidentally erasing a terrabyte when they think their updating the OS. Save your cloud is ready arguments, this hedge fund manager can wait.
Afterall, who wants to be the hedge fund manager who has to tell their wealthy client that all of their data was hijacked by an angry employee at Amazon or a teenager on a red Bull binge in their parent's basement.
With this in mind, senior editor Justin Grant looks at the buy side's rush to adopt colocation technology. The chance to be closer to the market has shaved minutes, seconds and half-seconds off of trade orders but firms have paid a high price for this speed. More than a few experts wonder if they really needed all of that super-fast access. Was the rush to adopt new speed killing the bottom line?
Speaking of new technology, editor at large Ivy Schmerken looks at the news from Deutsche Bank. The leading provider of FX revamped its Autobahn FX platform to cater to different client segments and respond to changes in regulation and market structure.
In terms of redesigning the technology, the platform was built to be more modular, and flexible to react to changes and deliver applications, such as new features, new products to trade, and information to comply with regulations, in a much quicker way, said [one expert].
With the changes looming on the regulatory front, the bank felt it needed to give clients more flexibility, new products and new ways to interact with Deutsche Bank. The Web-based platform is also much faster in terms of speed of pricing, login times, trade affirmation, reporting and the ability to customize information for the user, said [the expert].
Innovation doesn't stop in a recession but it will be interesting to see how many of Deutsche Bank's clients adopt the new version of Autobahn - or if it gives the German bank new customers. At a recent event on data management, the panel all shared their views from life in the IT trenches: despite sitting on large stores of money and handing out major bonuses, large investment houses are maintaining their (modest) IT budgets. Even though data remains a mess and systems barely speak with one another inside their back offices the push for more money to fix these problems remains virtually unchanged. It's the only the ambitious buy side firm that seems willing to spend extra for the competitive advantage.
Now or Later? Let's hope cautious technology decisions at the moment do not cause problems down the road.Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio