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What was cutting-edge generative AI (GenAI) in early 2024 will look outdated over the next twelve months.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. 

The post The TRADE predictions series 2025: Artificial intelligence appeared first on The TRADE.

The biennial survey from Linedata included responses from 265 firms in the Americas, Europe, and APAC and includes comparative findings which pinpoint key variances between regions.

In the drive towards more efficient operations, 57% of respondents are betting on automation, the survey revealed – naming it “a top strategic priority for the next 12 months,” closely followed by cost-cutting initiatives at 55%.

On the other end of the spectrum, “increasing presence in cryptocurrencies and digital assets” was the least popular focus amongst survey participants with only 8% highlighting it as a top priority.

In the UK specifically, the top two short-term priorities were the same; however, here cost-cutting initiatives (54%) was top, closely followed by “deeper automation to drive business results” (49%).

The survey also found that AI adoption appeared more prominent in the front-office, while middle- and back-office functions lagged behind, with only 22% of AI deployment in trade execution.

Overall, the area where AI has been most deployed across the industry globally is in investment research at 32%, revealed the survey, closely followed by portfolio analytics and risk management at 30%.

The survey also delved into another of the current hot topics – outsourcing. Looking at the numbers, there was not a huge divergence between regions in the approach to outsourcing trading and execution operations. Compared globally: North America led the way with 44% of respondents already outsourcing. The figure was 10% lower in Europe at 34%, with APAC closely behind at 33%.

The report explained: “Against a backdrop of accelerated digital transformation, rising cyber threats and ever-growing compliance demands, we see that outsourcing strategy is moving beyond a cost and resourcing play.”

The post Asset managers are prioritising operational efficiency via automation above all, Linedata survey reveals appeared first on The TRADE.

Asset managers are increasingly looking to data analytics and digitisation projects in the post-MiFID II and GDPR landscape, according to a new report.

In its annual Global Asset Management Survey, financial technology vendor Linedata found that buy-side firms are prioritising data-led projects to secure short-term successes to protect investment and operational performance, against the potential for further market disruption as a result of regulatory change.

“Asset managers were struck by a tumultuous end to last year that has led them to rapidly refocus on the critical initiatives that can boost operational efficiencies and alpha generation in 2019. In this environment, doing more with one of their greatest untapped assets – their data – is essential” said Gary Brackenridge, global head of R&D and North America asset management at Linedata.

“We expect to see more developments in this area as well as a rise in outsourcing, which can not only facilitate advanced data analysis, but enable managers to focus on delivering investment performance and exceptional client service to retain and attract assets” he added.

The Linedata survey found that maintaining investment performance is currently the biggest business challenge for the buy-side, with 34% of respondents citing this issue ahead of other concerns including attracting new client assets (33%) and sustaining operational efficiency (33%).

Meanwhile, doing more with data was viewed as particularly important to investment performance and nearly a quarter of asset managers (23%) said improvements to investment strategy decision-making is the biggest data analytics opportunity.

The post Buy-side bringing data and digitisation projects to the fore appeared first on The TRADE.

Asset managers are shifting their attention from regulatory matters, such as MiFID, II to cryptocurrencies and emerging disruptive technologies, according to a new survey from Linedata.  

Linedata’s annual global asset management survey found that 20% of those surveyed, including asset managers, hedge funds and wealth managers, agreed cryptocurrencies like Bitcoin are a key area of growth over the next 12 months.

At the same, the percentage of buy-siders concerned with regulatory changes has decreased as digital assets are fast becoming a strong candidate for new investment opportunities.

Linedata’s 2017 survey found 51% of asset managers saw regulation such as MiFID II as a major concern over the forthcoming year, however this year that figure has fallen to 37%.

“Now that the regulatory dust has settled asset managers are looking to future growth and the challenges and the opportunities offered by emerging disruptive technologies,” said Sophie Février, co-head of asset management and innovation director at Linedata.

“The years ahead will bring exciting change as conceptual testing leads to implementation in areas such as robotic process automation and artificial intelligence tools.”

MiFID II remains, however, the regulation with the greatest business impact according to 52% of respondents, due to trade and transaction reporting and product governance requirements.

Arnaud Allmang, co-head of asset management at Linedata, added that the survey reflects a sector embarking on a transformation process to succeed and grow.

“The emergence of big data and analytics allows asset management firms to enhance the efficiency of their decision-making process, and to provide products and services to clients, which can distinguish them from the crowd,” he said.

The post Buy-side shifts focus from MiFID II to Bitcoin appeared first on The TRADE.

Linedata has released a new version of its Global Hedge platform to include functions relating to cryptocurrencies.

The Global Hedge platform will now allow users to trade, book and track Bitcoin and other related derivatives.

The update aims to improve efficiency, product delivery flexibility, data management and automation across the portfolio management lifecycle, Linedata said.

The platform allows users to generate orders with real-time analysis, and simplifies the processes of taking on additional counterparties and launching new products.

It also allows for storage and management of extra data that has come about as asset managers and counterparties interact more amid regulatory change.

“Increasing regulation continues to drive dependency on electronic trading, digitisation and real-time reporting - it’s now more important than ever for managers globally to have access to the right data and technology to help them mitigate risks and manage costs,” said Karen Hui, global product manager at Linedata.

“This version of Linedata Global Hedge responds to these evolving challenges and prioritises our clients’ user experience, an important part of our drive to support our clients in staying ahead of the shifting landscape.”

The post Linedata adds Bitcoin in Global Hedge platform upgrade appeared first on The TRADE.

The deal will enable Linedata to expand its oursourcing business across the Asia Pacific region, while enabling QRMO to benefit from adding a range of new outsourced services from Linedata’s technology solution.

Linedata said the acquisition is part of a targeted strategic plan to develop a wide geographic presence in key markets. In January this year, it bought US-based middle office technology provider Gravitas.

QRMO was founded in 2006 and currently services 30 clients including hedge funds, wealth managers and retail funds. It employs 30 staff in Hong Kong.

Anvaraly Jiva, founder and CEO of Linedata, said: “This is an exciting and powerful addition to the Linedata business, particularly as more and more financial institutions look to outsource and benefit from scalable, best-in-class technologies and services. For more than a decade, QRMO has transformed the operational performance of asset managers across Asia. Integrating these services with our technologies strengthens the value of our offerings to the global financial services community.”

The post Linedata buys Hong Kong outsourcer to target Asian markets appeared first on The TRADE.