Improving productivity
Faced with the unrelenting pressure to reduce costs, increase productivity, and build and nurture customer relationships while generating superior returns, investment and asset management firms continually seek ways to use technology to their advantage. As the adoption of electronic trading has accelerated, especially across OTC instruments, the opportunity to automate trading, either fully or partially, and the advantages it provides are too compelling to ignore.
Automation in bond markets can transform how the fixed-income trading desk operates by delivering greater speed and accuracy in trading, while freeing up traders to work on higher-value tasks that benefit from human input. This includes the bandwidth to focus on more valuable tasks such as working on complex orders, managing client relationships, or engaging with their portfolio managers to better advise on order selection upfront.
The power of TCA and Automation together
Aside from the benefits of allowing an investment manager to scale its trading desk using technology in addition to human capital many are now realizing that automation can also yield improvements to execution performance as measured through transaction cost analysis (TCA).
For example, Baader Bank Asset Management Services deployed Bloomberg’s solutions to route its trades to market faster, reduce trading decision time and generate better prices while minimizing exposure to market volatility. Trades executed via Bloomberg’s Rule Builder (RBLD), a multi-asset no-code automation offering, outperformed manual trades and generated a 16% performance increase against their arrival price benchmark. Baader were able to easily obtain this data point using an out-of-the-box integration between RBLD and Bloomberg’s multi-asset TCA product (BTCA).
In addition to performance improvements, Baader Bank, like many other clients, views Bloomberg’s RBLD as a vehicle to grow its business. “The higher efficiency due to the integration of RBLD in our trading desk workflow gives us valuable additional resources to scale our asset management services business line,” says Andreas Nomrowski, Head of Asset Management & Services, Baader Bank.
Codifying best execution across asset classes
For global institutions with many desks across asset classes, ‘codifying’ their execution policy as required to implement automation presents an opportunity to truly industrialize their trading business and take performance to a new level.