The pandemic drew attention to the value of outsourcing trading desks, and, several years later, demand for outsourced trading technology remains strong.  Outsourced trading desks have proven to be efficient profit drivers for sell-side firms due to their scalability, while their inherent economies of scale are increasingly attractive to the buy-side. It therefore makes sense that they have finally become popular, and we believe that they are here to stay.

Sell-side firms seeking to develop a competitive outsourced trading desk should invest in EMS technology, such as the multi-asset class TradeSmart. TradeSmart instantly brings several essential features to any outsourced trading desk: a single interface for central, execution oversight; embedded data and analytics for insights, reporting and AI innovation; cross-asset class market connectivity as the rise in fixed income electronic trading continues; and adaptable, SaaS-based architecture for seamless downloads of continuous, cutting-edge innovation.

Below we unpack each of these features in the context of sell-side outsourced trading desks.

Stronger oversight of clients

Sell-side firms seeking to establish outsourced trading desks will need to prove that they can efficiently monitor their clients. The most successful desks will be the ones which can manage multiple clients and complex trades with ease. Outsourced trading desks fortified by TradeSmart will have a clear advantage due to its single, streamlined interface designed to manage trades for multiple clients.

More accurate trade reporting

Embedded and normalized data has a profound impact on operations, TCA, and other aspects of the trade lifecycle, and can differentiate an outsourced trading offering.

Data-driven decision-making is critical for traders, and TradeSmart offers client-level trade analytics, including in-depth, real-time insights into trading performance. Arming traders with clear information about their execution quality and areas for improvement will further strengthen the centralized oversight inherent to the outsourced trading desk business model.

Bonus: offering clients embedded data within their trading technology sets them up to implement AI features and greater efficiencies. 

Capitalize on the rise of fixed income electronic trading

The rise of fixed-income electronic trading has significant implications on bond market structure and access to liquidity sources, necessitating robust, comprehensive technology that continuously adapts.  If you have decided to invest in an EMS for your outsourced trading desk, set yourself up for a multi-asset class future with TradeSmart.

TradeSmart contains the industry’s most comprehensive fixed income EMS offering, covering a plethora of instrument types from derivatives, government and corporate bonds to municipal, high-yield, and emerging market debt.

Market connectivity is a cornerstone of successful bond trading, and TradeSmart is connected to all major bond venues and a growing set of direct dealer connections, ensuring that traders can access the best prices and liquidity. This extensive network connectivity empowers sell-side firms to execute trades efficiently and effectively, providing their clients with superior execution quality and optimal trading outcomes.

Quick set up followed by innovation downloads

SaaS-based systems can be implemented in a matter of weeks. Following that, users benefit from continuous innovation with each web-based release. Furthermore, SaaS architecture means clients of outsourced trading desks can be onboarded very quickly.

Conclusion

Outsourced trading is here to stay. By investing in TradeSmart, sell-side firms can move quickly to future proof their operations and increase and diversify their revenue streams.

 

Insight