New research from TowerGroup finds that although electronification has not been adopted as readily in fixed-income as in the equity markets, e-trading is rapidly becoming a mainstay for certain product types.
Soon, TowerGroup predicts, any new product development in the securities markets will need to be equipped for electronic execution and processing to be widely accepted.
“Some firms have remained hesitant to embrace electronification for fear of losing control over lucrative fixed-income franchises and their ‘high touch’ approach to the market,” said Tom Price, senior analyst in the Securities & Capital Markets practice at TowerGroup and author of the research. “Yet ultimately the benefits of automation are too potent to ignore, given that it provides for greater control of risk and facilitates best execution – two factors of paramount importance to regulators.”