Wall Street firms may not face the kind of operational nightmare
that, in the late 1960s, forced the New York Stock Exchange to
close on Wednesdays for several months to allow them to process
mountains of paper certificates that piled up in back offices. But
soaring electronic trading volumes and demands to support
increasingly complex, global and multi-asset-class investment
strategies are putting unaccustomed stress on trading platforms and
market data systems.
They're suffering the consequences of "two dominant themes that
have overseen the development of trading systems over the past ten
years," said Kevin Bourne, global head of equities execution for
HSBC in London. "One is that a highly siloed approach has been
taken to asset classes. The other is regionalization--people built
systems based on a regional P&L [profit and loss]." Many
sell-side firms are grappling with a hodgepodge of systems with
little in the way of a common architecture, and until they upgrade
and rationalize those architectures, they will suffer continued
inefficiencies and face operational risks. |
