Buy-side traders are increasingly turning to automation tools to address rising demands for cost reduction, decision-making consistency, and outperforming competitors. OMS and EMS providers have evolved over the years to meet these changing needs. FactSet and The TRADE News outlines four key categories of automation feature requirements in the trading workflow;
Firstly, there’s a growing need for automated signal detection and reaction during the working state of orders, especially in volatile market conditions where traders can easily miss important signals. Secondly, traders are keen on incorporating their proprietary data into the automation process, recognizing its value in enhancing automated routing. Thirdly, there’s a demand for explainability in automation systems to improve transparency and troubleshooting. Finally, oversight of automated workflows is crucial for risk reduction, given the potential for unintended behaviour changes due to complex rules.
The adoption of automation in buyside trading extends beyond basic tasks, with traders increasingly leveraging technology for monitoring, adjusting orders, and utilizing proprietary data. This shift is driven by early automation capabilities that built trust and confidence, leading to a desire for further efficiencies throughout the entire trade-order lifecycle. As automation becomes a critical capability, traders seek oversight, explainability, and the ability to incorporate their data into the process to stay competitive and meet evolving market demands.