Driving change in Australia
Citi’s Head of Australia & NZ Electronic Execution Murrough O’Brien looks at ongoing technological and competitive change.
Competition is usually the biggest driver of technological change, however many of the technology projects that brokers have been implementing over the past few years in Australia have been driven by a raft of regulatory changes. In tandem with this, the ASX and Chi-X have been continually updating their offerings, so brokers have had to expend large amounts of resources on what are, in essence, unavoidable changes to the market.
However, since the 2008 financial crisis, these resources have been in decline, so doing more with less and doing it smarter has become something of a mantra across the street. For a broker this means leveraging our global footprint and continually using the intellectual capital and technology that we’ve created in other regions to fit the local market. While this sounds easy, it requires investment in the right local expertise as well as increased communication with our global colleagues. The rolling out and optimising of global products such as new connectivity infrastructure, Smart Order Routers (SORs) and algorithmic frameworks are prime examples of the increased synergies between local and global that is likely to continue into the future.
In a similar vein, where we see value in automating tasks to take the load off of local resources we leap at the opportunity. Since the introduction of competition, there’s been considerable growth in the amount of systems that make up our trading infrastructure and the complexity of their interactions. This has led to a drive to increase the automation of testing across all of our systems. Automation frees valuable resources, increases scalability and reduces release times. Intertwined with this, we have streamlined the processing of releases while ensuring that there are touch-points across the business, technology and compliance for each release providing a best in class review process to ensure issues are captured before release. Given the increased regulatory scrutiny both in Australia and globally on electronic trading, the importance of getting this right is vital to the individual broker and the broader market. Neither user acceptance testing automation nor improved processes are very glamorous but they are becoming the bedrock of reliable platforms.
Regulatory and venue updates have been coming thick and fast over the past few years and have been a priority for all participants, but with change comes the opportunity to improve our clients’ trading experience, but the trading platforms need to be nimbler in order to facilitate this on-going evolution. The lighter nature of the trading systems also has the spin-off benefit of increased and more rapid customisability. The theme of customisations is something that we’ve seen a pronounced increase in over the past 6-12 months.
With more mandated technology changes on the horizon in Q3 and Q4 for the ASX and Chi-X, the need for brokers to be lighter on their feet and more efficient in how they achieve this will continue to be a major driver of technology in Australia.