Lesson 6 of 7
Technology is changing the face of the securities industry. It pervades all areas of this industry now. It enables greater efficiency, transparency for investors with more in-depth information, transparency of market data which is no longer the prerogative of few.
It helps increase efficiency by minimizing the time and resources for routine administrative tasks, and improving data consistency and work flows. In trading it helps optimize use of assets.
Technology is also helping build networks of data, market participants and the expertise generated therein.
Key areas of software application include Market Analytics, News wires, Data feeds and Customer data.
Data feed: A data feed is a mechanism of receiving live data from multiple sources to execute trade orders.
News wires: Web feeds are the common format. Bloomberg, Associated Press, United Press International and Reuters are some of the major news wires. These news wires keep researchers and brokers up to date with news and developments around the world. These in turn determine their decisions.
Market Analytics: This includes analysis of the customer data covering marketing research, marketing strategy, and marketing plans. The objective of a marketing analysis is to identify the general interest of the buying public and understand the growing changes and possible threats of the company as they relate to the strong and weak points of the business in the industry. It studies market size, market growth rate, market profitability, industry cost structure, distribution channels, market trends, and key success factors. Proprietary software enables securities firms do this.
Client data: Customers choose to keep close tabs on their accounts. Companies have to provide this information on a minute to minute rather than once in a quarter or year.
Technology has become a key differentiator in the business.
With settlements becoming almost real time, it is important the back end of the business be strong. Companies have expanded their portfolios, and the Internet has got settlements to real time. Information is easily available. Minimum bottlenecks and impediments in the operational processes of the firm enable better client servicing. Workflow management softwares help brokers in processing, trading and settling.