The first wave of gen-AI use cases across capital markets technology has sparked widespread energy and excitement about its future potential. At the same time, it has triggered a sense of urgency across infrastructure providers globally that they must act now to avoid being left behind.

Market operators face two critical questions today. Firstly, what is the right operating model and the critical capabilities they want to develop and maintain in-house or source from external providers? And secondly, how do they ensure that they will have access to these advanced capabilities, given the extraordinary level of energy and compute capacity that will be required to power their markets in the future?

If we look ahead to capital markets over the next two decades, the future of trading infrastructure will be built on a fabric of interconnected markets with a common data architecture, seamless connectivity throughout the ecosystem of exchanges and participants, minimal latency, and advanced AI-powered tooling.

Operators don’t have long to embark on their data and tech modernisation journey to get there, and we’re proud to be supporting so many of our infrastructure clients on this path. 

Gideon Mann, global head of AI technology, Millennium 

What was cutting-edge generative AI (GenAI) in early 2024 will look outdated over the next twelve months. Successful organisations will adopt a long-term GenAI strategy, balancing immediate applications with the flexibility to adapt to future innovations in this space.  

In the investment management sector, the diversity of challenges allows us to identify some of the most promising applications of GenAI. These are likely to result from a collaborative approach between technologists and their end users including investment professionals, legal, compliance and finance teams, among others. We have seen early applications of GenAI in the areas of market observability, risk assessment and operational efficiency. In 2025, organisations will be looking to scale the use cases that have shown the greatest potential. 

Jamil Jiva, global head of asset management, Linedata 

As we leave 2024 behind, artificial intelligence is set to transform industry practices. From risk management and regulatory compliance to predictive analytics and cybersecurity, AI promises to bring a new era of transparency, efficiency and innovation to the finance ecosystem. 

The widespread adoption of Explainable Artificial Intelligence (XAI) in risk assessment and management systems marks a decisive turning point. This technology is finally lifting the veil on the ‘black box’ of algorithms behind AI inference systems, offering a clear understanding of AI decision-making processes. This creates an opportunity for financial institutions to renew and reinforce the confidence of customers and regulators while improving the accuracy of their risk models. 

Nick Wood, AI product manager, FINBOURNE  

While AI clearly has the potential to enhance operating margins and reshape the asset management industry, serious adoption remains slow. This hold up is largely due to a lack of confidence in the incumbent data management processes, which need to be designed to support AI technologies.

While AI can certainly act as a feature and capability in an overall workflow, firms must be able to explain the models and trust the quality of the underlying data to get there. With AI showing so much promise, prioritising modern data infrastructures to address data quality concerns will be a priority for many asset managers next year. 

Jim Kwiatkowski, chief executive, LTX (a Broadridge company) 

This year, the fixed-income market experienced notable advancements, with credit market volumes reaching an average daily volume of $49.8 billion, reflecting a 23% year-over-year increase. This growth is projected to continue into 2025, fuelled by a steady increase of credit e-trading. 

Looking ahead, AI is poised to play a pivotal role in bond trading, transforming how fixed-income traders, analysts and portfolio managers process and leverage the growing volume of data from electronic trading. By enabling streamlined access to vast, disparate datasets, AI enhances decision-making in areas like bond selection, trade list construction and protocol optimisation. As AI adoption scales, the market can expect a more vibrant secondary trading environment characterised by improved pricing, enhanced liquidity, and stronger overall performance. 

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Bobbie Port

Following the launch, clients can execute orders using algorithms in Australia, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Singapore, and Thailand.

Kepler said the development marked a significant step forward in its “global execution strategy” in an update on social media.

“KCx has long established its presence in both high-touch and program trading, and to continue driving innovation and disruption, it is essential to offer a full suite of services globally,” Bobbie Port, head of electronic distribution at KCx told The TRADE.

“Today, we are proud to announce that we have achieved this milestone by successfully deploying algorithms in the APAC region.”

Port assumed his role as head of electronic distribution in 2022 after joining Kepler in 2011. He has had an extensive career in electronic trading sales, with his most recent role previously to Kepler focusing specifically on direct market access and algo execution sales at Instinet.

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Erik Tham

The move is set to enhance the liquidity and workflow options available to Axess IQ users.

Erik Tham, head of product management, global private banking at MarketAxess, said: “This collaboration between UBS and MarketAxess makes Axess IQ an even more powerful one-stop-shop. The seamless integration with UBS now allows users of Axess IQ to place their limit orders with a single click from their Axess IQ order manager straight to UBS Bond Port’s liquidity pool.

“All orders will continue to be monitored in Axess IQ, giving the trader maximum control with less clicks – further boosting execution workflow efficiency.”

Axess IQ’s limit monitoring, data driven order and execution management, and RFQ trading features are set to be particularly impactful when it comes to increasing the efficiency of execution desks which use UBS Bond Port.

Specifically, execution traders can remain using Axess IQ as their central order manager while also accessing UBS Bond Port as well as other various trading protocols and liquidity pools, without having to navigate away from MarketAxess.  

“Enabling Bond Port and MarketAxess’ mutual clients to route orders directly to Bond Port via Axess IQ is another great illustration of UBS’s collaboration with market participants to allow clients to participate seamlessly with our unique liquidity leveraging their existing connections,” added Mark Eardley, global product manager at UBS Bond Port.

“By utilising our proprietary API, MarketAxess will be the first to benefit from future Bond Port functionality enhancements.”

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The transaction was made with Banque de France and represents the first repo transaction in digital securities with an Eurosystem’s central bank.

“This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a Central Bank Digital Currency (CBDC) to improve the liquidity of digital financial securities,” said Societe Generale in an official announcement.
 
Specifically, the transaction consisted of Societe Generale depositing some bonds issued in 2020 on the public Ethereum blockchain as collateral with the Banque de France in exchange for CBDC issued by the Banque de France on its DL3S blockchain.

Societe Generale is demonstrably continuing to make moves to adapt to technological developments which benefit their client base.

Last year, AXA Investment Managers (AXA IM) completed its first market transaction using stablecoins issued by SG-FORGE as part of a new joint experiment.

SG-FORGE’s CoinVertible (EURCV) stablecoins were used as part of the transaction.

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By leveraging Broadridge’s Securities Finance and Collateral Management (SFCM) solution, FAB will be able to bolster its coverage of global fixed income and equities markets.

The development comes as part of the bank’s drive to expand securities lending in the UAE and wider Middle East.

“This collaboration caters for the growing demand for securities lending and borrowing within the Middle East and is aligned both with local regulatory needs and with international best practices,” said Darren Crowther, head of securities finance and collateral management at Broadridge. 

Broadridge’s provision of its SFCM platform — the first AWS SaaS deployment in the region — demonstrates a renewed focus in the Middle East and indicates readiness to support FAB’s strategic goals, the firm said in a statement.

As FAB navigates the evolving landscape of securities borrowing and lending regulations in the region’s markets.

The collaboration is also expected to yield new opportunities and efficiencies for FAB that will benefit clients across the globe – particularly as it navigates the evolving landscape of securities borrowing and lending regulations in the region’s markets.

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State Street said the first phase of the integration was completed ahead of schedule, after the custodian was awarded with a middle-office mandate at the end of 2023. The second and final phase of the migration is targeted for completion in Q1 2026.

“We are excited to partner with State Street on their Alpha platform,” said, Young Lee, chief operating officer from Harris | Oakmark. “We have been very pleased with the progress made during the first phase of the migration as the platform will allow us to operate in a highly efficient operating environment and continue to provide exceptional services to our clients.”

State Street’s Alpha proposition has gone from strength to strength in recent months. During the firm’s third quarter earnings call, chief executive Ron O’Hanley spoke of the competitive advantage that it gives the firm.

“For years now, we’ve talked about the strategy and why we think it’s important and why we think it gives us a competitive advantage,” he said. “One of the reasons is just that. It’s the opportunity to deepen relationships. And the other reason why it’s so important is the flip side of taking long to install is that the business tends to be quite sticky because it’s much more analogous to enterprise outsourcing.”

“Harris | Oakmark marks another significant milestone for our Alpha business broadly,” says John Plansky, head of State Street Alpha. “Providing middle office services to more than 2,000 of their private wealth and retail SMA accounts allows us to deepen our relationship with Harris | Oakmark and further showcase our data capabilities for wealth managers.”

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This collaboration aims to streamline operations, mitigate risks, and simplify workflows for shared clients in the financial services industry. 

“Our partnership with Aladdin represents a pivotal evolution for Saphyre, building on our already extensive network of top-tier investment managers and financial institutions,” said Ray Shivers, COO of Saphyre. “By seamlessly integrating our AI-powered onboarding and data management solutions with the Aladdin platform, we are not only addressing critical operational challenges but also enhancing the experience for our clients at scale.” 

Saphyre noted that financial institutions frequently grapple with challenges such as fragmented systems, labour-intensive processes, and regulatory hurdles during pre-trade onboarding and account maintenance.  

This tie-up, linking AI-driven onboarding and data management solutions with the Aladdin platform, aims to provide an efficient solution to these issues. 

Shivers added: “This collaboration demonstrates our commitment to setting new industry standards in operational excellence by driving efficiency, and reducing risk and regulatory compliance for our clients.” 

The integration introduces end-to-end automation for investment managers, addressing operational challenges and adapting to evolving industry requirements in the financial services sector. 

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Bloomberg’s foreign exchange electronic trading platform (FXGO) BMatch solution will provide spot matching functionality to the local interbank community for US dollar against the Nigerian naira.

The solution allows anonymous orders to be placed into a central limit order book, which are displayed and then matched with counterparty orders based on mutual trading limits and other specificities from each bank.

Banks can integrate the offering with their middle- and back-office systems.

Bloomberg added that consolidated trade statistics can also be calculated and made available to the market.

“We are pleased to partner with Bloomberg at this critical phase of the FX market reforms being undertaken by the CBN to enhance the price discovery process with the adoption of the Bloomberg BMatch, a more efficient FX pricing system in the market”, said Omolara Omotunde Duke, director of financial markets at CBN.

“The BMatch will provide a robust oversight function for the central bank’s market surveillance activities and deliver better transparency on the prevailing market determined exchange rate. This will be supported by the adoption of the Nigeria FX code by market participants to promote ethical FX market activities.”

FXGO is Bloomberg’s multi-bank FX trading solution providing access to liquidity through real-time pricing, workflow solutions and analytics for price takers worldwide to negotiate FX transactions with their bank relationships.

FXGO offers streaming or RFQ for spot, outrights, swaps, NDFs, deposits, precious metals and options in any currency pair and tenor, alongside providing access to algorithmic order solutions from over 30 providers.

“We are proud to support CBN with our tailored BMatch solution and deliver with it increased transparency, liquidity and efficiency for the Nigeria FX markets,” said Tod Van Name, global head of FX electronic trading at Bloomberg.

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The new service will offer insights to hedge funds, asset managers and other buy-side based off real-time liquidity mapping. It claims to be the only service of its kind, leveraging private and public data to understanding the liquidity landscape, including potential dark fil locations.

Broadridge said its approach identifies “ideal algorithmic execution” for orders and reduces outliers to improve trading costs. 

The service includes real-time alerts and in-trade analysis, allowing for in-flight adjustments.

The service is now available to NYFIX routing customers in the US equities market, with future plans to extend access to clients on other order routing networks.

“Algo traders will now have a quantitative, data-driven service to power critical trading decisions,” said George Rosenberger, head of NYFIX, Broadridge Trading and Connectivity Solutions. 

“By harnessing the power of AI and historical insights, we’re giving our clients the tools they need to navigate complex markets with greater precision and confidence. This innovative solution not only optimises trading strategies, but also reduces costs, making it an invaluable asset for the buy-side.”

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BMO will now offer a range of trading opportunities tailored to their institutional client base through OptimX.

“BMO has been at the forefront of delivering cutting-edge trading technology to its global clients,” said Peter McStay, head of OptimX EMEA.  

“We are thrilled to partner with a leading European broker and are eager to expand this collaboration across global markets in the near future.”

The two firms noted that the strategic partnership meets increasing demand from institutional traders for a centralised technology that provides improved access to significant liquidity.

Watch now: BMO Capital Markets on the success of their collaborative approach

“We welcome the opportunity to expand our partnership with OptimX and deliver an opportunity to help facilitate blocks for our institutional clients,” said Mike Green, managing director, chief operating officer, EMEA electronic trading at BMO Capital.

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