As buy-side desks increasingly trade across asset classes, consistent user experience and shared technology have become critical for performance, efficiency, and cost control, says Andrew Cole, head of fixed income execution product, and Jessica Hamilton, head of Execute analytics at JP Morgan. Speaking to Trader TV, Cole and Hamilton discuss the expansion of single-dealer platforms and how execution analytics are evolving from post-trade reporting to real-time, decision-enabling tools, underpinned by standardized data “blueprints” for normalizing data. Looking ahead, they say innovation and efforts to support trading desks will focus on streaming prices, algorithmic trading, derivatives, and enhancing interoperability across analytics.
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Interview
Josephine Gallagher – A number of banks have been pushing for the use of their single dealer platforms. What’s driving this momentum, and what are some of the key trends that are emerging?
Andrew Cole – Yeah, like, I think that the single bank platform obviously has a real benefit, both internally and externally. For most banks, including JP Morgan, our internal users are our key first stakeholders in using any new functionality. We’re partnering and sat alongside the traders and the salespeople on the desk, so we’re regularly able to ask them for feedback and make sure we’re honing the features that we’re offering, and then when it comes to rolling out those features to the clients, they similarly can benefit from that internal usage. From JP Morgan’s perspective, obviously, the more touch points we have with the clients that we trade with, the tighter those relationships can be. We like to build features and functionality that is specific to them. It’s great to see so many of our peers pushing their single-bank offerings. We’re excited about that competition. I think, if you look at it generally, you know, obviously these platforms, they were called single bank platforms, but they were mostly a place where people transacted FX and over the years, you know, spurred on by the actions of our competitors, we tend to try and externalize everything that we’re building, or as much as possible of what we build for our internal users, to our clients. And you know that increased usage just means that we can continue to improve the offering, improve the functionality and you know, really drive best-in-class financial technology.
Josephine Gallagher – We also hear a lot about how desks are becoming more multi-asset. How significant is the shift, and how are you seeing this trend shape buy-side desks?
Andrew Cole – Yeah, I think if you’ve attended any of the conferences in the last few years, certainly in the FX sector, there’s been a lot of talk, a lot of buzz around, you know, multi-asset trading and the demand for platforms that facilitate those kinds of desks. The reality is, once you’re trading multiple asset classes, having a consistent user experience and technology offering is obviously increasingly important, both from an efficiency of usage perspective and also, of course, a cost perspective. We made the decision a few years ago to merge the technology that we offer our internal sales people and our clients. And what that means is all of the asset classes that we have voice sales transacting in, we now have a software package that we’re increasingly looking at rolling out to clients directly. And obviously the knock on effect on that is when a client comes to us and says, we’re setting up a multi-asset execution desk. Which asset classes can you support? We have a platform that they’re very familiar with from the FX sector, that they’ve been using for a number of years. And you know now they know that we support not only FX, but FX options, credit rates, et cetera, and they can service that in one place.
Josephine Gallagher – How is the multi asset class analytics space maturing and where do you see the greatest potential for growth?
Jessica Hamilton – When we look at the execution analytics space, at JP Morgan, at least, what we’ve seen over the past 18 months has been quite remarkable. Within Execute analytics, we’ve grown from covering four asset classes to now 11. Analytics are no longer something that clients are asking for as a nice to have. They are an assumed part of the service. So if you look at some of the newer products that we’ve introduced to the single dealer platform, you know, repo or BWICs (Bid Wanted in Competition) in the securitized product space, analytics were there right from day one in the design, you know. We know we need to give our clients analytics upfront for these products to be successful. In 2021, we took the decision to carve out a dedicated team to cross-asset execution analytics. We started with what we would call your traditional E-Analytics., your market data, your TCAs (Transaction Cost Analysis) for FX and Treasury orders, but the scope has really deepened since then. We’re now focused more on real-time axes, predictive volumes and volatility profiles, net flows, pre-trade modeling, and we’re seeing clients interact with our analytics at levels we’ve never seen before. You know, we’re up 25% this year, and we’ve more than doubled our usage over the past two years. The strongest growth area, I would say, is what we call decision enabling analytics. So these are the tools that we give to our traders and our clients to help them at the point of execution, you know, deciding what, when, where, why and how to trade. The focus really has moved from this more retrospective type analysis to real-time decision making support, and we now offer everything from volatility surfaces to tailored trade ideas to simulation environment, payoff structures and the demand keeps growing. It’s very clear that data and analytics are central to how modern trading operates.
Josephine Gallagher – As we know equities, fixed income and ethics are very different asset types. What is your methodology for normalizing pre and post trade data across assets?
Jessica Hamilton – I think the key to our success has really been identifying the common DNA across these asset classes while still respecting their unique characteristics. It’s about finding that sweet spot where we can scale efficiently without losing the nuances that matter. What this looks like at JP Morgan is something we call analytics blueprints, where we try and standardize the data architecture, we utilize common UI (User Interface) characteristics, and we try and minimize the custom code, and that allows us to scale at a rate like never before. We now offer pre trade modeling for FX, US Treasuries and futures algos, and we either offer or will offer access across a number of businesses like repo, FX forwards, FX options, corporate bonds. Do all these markets operate in the same way? Absolutely not. But do they all have common DNA that allows us to blueprint their analytics offering from a UI perspective and data architecture, perspective, absolutely. The core functionality, you know, interactive UIs, real-time distribution, data integration, those stay consistent, but we customize the data for each asset class. I think the real breakthrough for us has been treating analytics as a horizontal business, instead of these vertical silos, it’s meant we can scale, do more for our clients and provide a consistent experience for those who are trading multi asset.
Josephine Gallagher – Looking ahead, how do you anticipate multi-asset desks and services in the space to evolve?
Andrew Cole – I think the demand that we’ve seen will obviously only continue to grow. I think especially when you have the same users trading these asset classes, they’ll naturally start to look for the same functionality. So when you take that from an Execute perspective, you know, the first goal for the platform is to ensure that we’re able to stream click-to-trade execution in any of the products that JP Morgan is capable of streaming out, whether that’s commodities, FX, rates, credit bonds. Once you have that streaming price, you know, one of the first things that was added in FX was orders and algorithmic trading. We’ve now added that in US Treasuries, and we’re pushing into basis, futures versus Treasuries. The idea that clients that trade algorithmically in one asset class will want it in another is just natural evolution. And then the third thing after, you know, the streaming and the orders is the derivatives and the structuring of more complicated products. And we definitely see the demand that we’ve had for many years in FXO (FX Options) evolving and graduating into the rates in the credit space through 2026, and beyond, yeah.
Jessica Hamilton – And I think from an analytics perspective, demand will continue to be consistent in our established businesses, but it’s exciting the opportunity that we have to grow in the more derivative space as we add more products on for execution, analytics will be there right by their side as a way to engage clients with our offering and distinguish our single dealer trading platform. And then looking from a more holistic perspective, I think seamless interoperability has a big role to play here, our clients are not going to tolerate having to navigate multiple front doors. They will expect seamless integration between their analytics, their execution, their research across multiple asset classes. I think the firms that will win going forward are the ones that can deliver this unified experience while still maintaining the depth and sophistication that each asset class demands. It’s not about having more products, it’s about creating this ecosystem where the whole is genuinely greater than the sum of each of its parts. And you know, that’s exactly what we’re focused on and building at JP Morgan.
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