To discuss the evolution of how investment managers are leveraging data and analytics on the buy side, as well as trends in the EMS space (execution management system), FactSet sat down with news outlet WatersTechnology. View the discussion with FactSet Senior Director of Trading Jason Pangretic, and Head of Americas Front Office Sales & Account Management Maurice Iragorri. You can also read the highlights here.
How will data and analytics play into execution management systems in the next 3 – 5 years? Harnessing data and analytics in the EMS and across systems will be critical to client’s outcomes going forward. Streaming services such as Amazon, Hulu, and Netflix present content based on viewers’ interests and needs. Data and analytics in the EMS must do the same—provide portfolio managers and traders with insights based on their investment priorities and trading objectives, in real time and visual layouts. This is key to clients accessing the optimal liquidity and achieving higher execution performance.
Could integrated order/execution systems (O-EMSs) become the norm for the buy side? The single solution OMS/EMS combination debate continues. As investment firms grow in AUM, the more crucial the need becomes for the best-of-breed EMS to integrate with the operational OMS and enable advanced trading-specific capabilities and advantages. Clients must be careful not to sacrifice trading performance just for the sake of having one O-EMS that would leave them straddled with a basic trading platform.
Clients are also reviewing how to connect workflows across analyst and portfolio management tools to their OMS and EMS, to monitor internal research notes, and effectively simulate their portfolios to generate their target investment outcomes. The likely path for trading is a multi-asset EMS—which we offer for FX currencies, Equities, Derivatives, and Fixed Income—that connects into our clients’ broader portfolio lifecycle. This allows for true client differentiation in their trading process to solve complexity through integrated workflows and to achieve their target operating model of flexibility and scale.
What’s the core trend in systems integration for the buy side? A lot of our clients use a best-in-breed approach for both systems (EMS/OMS), and they need open interoperability between both. Near term, the trend is an open ecosystem that enables you to move data and analytics openly across in-house and vendor systems, to mitigate risks, and drive workflow efficiencies across the entire investment ecosystem.
It’s about getting the right data in open data flows to the right systems and people at the right time, from idea generation to research to portfolio management and trading. This is vital to unlock the value of the data to translate into lower transaction costs and align analysts, portfolio managers, and traders closer together across the entire portfolio lifecycle.
Going forward, how do you see trading automation driving the industry? Across our clients, demand for trading automation continues to increase across all asset classes. Their needs center on how to automate intelligently and scale their trading-desk capacity.
We think about automation in two parts. First in terms of operational automation to streamline manual processes and enable decision support. Second, we focus on trading automation across asset classes, freeing up time to focus on advising on liquidity and market color, broker research, and TCA analytics. Trading desks today and in the future need support to automate highly complex workflows across multiple liquidity points and assets.
To learn more about FactSet’s Front Office solutions for traders, portfolio managers and analysts, visit our Portfolio Management and Trading page.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.
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