MiFID II is a major factor when it comes to top tech investment priorities in 2018 and investment in reporting technology is more popular than automation, according to a survey of European trading heads.
TradeTech and WBR Insights ‘More views from the city’ survey revealed that analytics and data management tools are the most popular technology investments over the next 12 months for 85% of European Heads of Trading – a trend driven by MiFID II reporting and transparency requirements.
As a result of the increasing cost of compliance caused by MiFID II, budgetary restraints (62% of respondents) and platforms not offering value for money (61% of respondents) are the greatest barriers to equity traders adoption of new technologies.
In response to these growing costs, all survey respondents stated they intend to consolidate solutions and 68% intend to outsource more technology to access liquidity and better technology to third-party venues and vendors.
The report also reveals:
- 53% of respondents stated that the biggest challenge they are experiencing with trading platforms is being unable to work cross-asset, closely followed by 50% responding that it is platforms providing inconsistent data.
- The biggest challenge in sourcing liquidity is poor algo performance (31% of respondents), followed by the inability to find counterparts that will trade blocks (20% of respondents).
- Behind analytics and data management tools, automation is the second most popular area of technology investment over the next 12 months (63% of respondents).
The report surveyed 100 heads of trading in the UK, France, Germany and the Nordics.