It was in ancient times when banking and finance were first established; currencies were coins, jewels, and other valuables hidden in temples and heavily guarded buildings allowing people to accumulate wealth or trade commodities for power or favours. Fast forward to today and online banking has both strengthened the connection between countries’ economies and accelerated the speed at which global trade is now undertaken.
It is an evolution that is never likely to slow given the rapid advancements and enhancements in technology. The question is, can the finance sector keep pace with its tech bedfellow?
To summarise in a single word – automation.
The rise and conquer of automation
Automation is not a new concept by any stretch. eTrading has been automated since computers were first available. Markets for simple products like FX and equities are now completely automated, and the effort is increasingly focussed on algorithms to identify and execute trade opportunities and manage positions without publishing intentions to the wider market.
Fixed income markets are in the midst of automation, and any manual intervention in the trade flow will erode or even remove profit margins. So, the time and cost efficiency of automation which comes with a very small window for error will continue to be expanded across more and more finance functions until almost everything is automated.
But automation can only be effective with close collaboration between technology, trading businesses, and the highly specialised teams managing it. As such, the specialist tech workforce can’t afford to simply keep up with changing demands and processes - it needs to be one or two steps ahead of the curve.