Volatility and Technology Are the Fuel Enabling Buy-side Traders to Stay in the Lead

The pressure has never been greater for buy-side traders and portfolio managers to ensure that they have the technological foundation to capture alpha in times of volatility. Will you stay in the lead or fall behind?

Speed to market is critical and competition for capital more intense than ever. Macroeconomic and geopolitical risk factors have given rise to bouts of volatility that most market participants expect to see continue throughout the year. The challenges of navigating turbulent markets while grappling with fee pressure and changing investor demands are here to stay. To succeed in such a competitive environment, portfolio managers are looking at innovative ways to capture alpha and risk premia, including the use of alternative data sources and emerging technologies such as artificial intelligence (AI) and machine learning. At the same time, buy-side managers face major cost pressures, caused by a myriad of factors, including fee compression, regulation and investor demands.

In short: the pressure has never been greater for buy-side traders and portfolio managers to ensure that they have the technological foundation to capture alpha in times of volatility.

What will it take for alpha generation to rise in what is poised to be a roller coaster of a year?

In such a febrile market environment, star managers will stand out, and they will be characterized by their technological readiness and capability to navigate uncertainty. The key to navigating what will continue to be a very volatile market and a year marked by uncertainty is a single technology partner that connects cross-asset trading, order management and portfolio management with powerful risk tools. To maintain growth, asset managers must modernize their platforms; the future front office will not be characterized by monolithic applications, but by loosely coupled services and APIs which can be easily integrated to enable investment decision support, portfolio management and investment operations.

At FIS, we believe the future of the front office is an integrated front office, powered by solutions built for flexibility, efficiency and speed. FIS’ Front Arena’s high-powered capabilities offer innovative technology for full trading, risk and portfolio life-cycle management, across equities, rates, credit, FX, commodities, inflation, volatility and hybrids such as convertible bonds. In this new article, read more about how an integrated front office platform can help keep buy-side traders in the lead.

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