As the vast selection of collaboration tools available to institutional traders continues to grow, coupled with the accelerated adoption of emerging technologies, many firms are struggling to address the knock-on effect this is having on trader workflows. In the seventh episode of Cloud9’s podcast series examining developments in the voice trading landscape, Cloud9’s Chief Operating Officer Jim Miller and Symphony’s Chief Product Officer Michael Lynch examine how fragmented workflows can be solved by consolidating trading tools with voice capabilities and how Symphony’s recent acquisition of Cloud9 is playing a key part in alleviating challenges.
Capital markets have undergone a seismic shift in recent years, particularly with the accelerated adoption of technology and cloud-based solutions over the last 15 months. One thing that has not changed, however, is the importance voice trading continues to play in the institutional landscape. And with the increasing levels of sophistication that are enabling individuals on and off the trading floor to communicate with each other – particularly through more advanced APIs – there is now a greater appetite than ever before for cloud-based trading solutions.
The days of solely relying on traditional trading turrets and private wires are dwindling away. Filling that gap are cloud-based, API-driven trading platforms that are driving innovation, enabling firms to streamline workflows, and empowering access to a virtual trading floor that will very soon become the norm across the industry.
In the last year alone, there has been more adoption of cloud than in the ten years prior combined. The pandemic has been a key driver, although this transition was certainly underway prior to last March. When remote working began last March, every firm had to quickly transition to 100% remote – something that cloud-based trading solutions and APIs already enable.
Firms are not only more comfortable with data residing in the cloud but they are now more frequently coming to vendors for help. In fact, leadership at major banks and financial institutions is becoming more outspoken about the need for cloud.
Some customers are generating more than 300,000 voice trading recordings each month. Thanks to advanced APIs and natural language processing (NLP) technology, firms are able to capture the audio of these conversations with 99% accuracy. This not only simplifies the regulatory and compliance process but also delivers more actionable insights that elevate performance.
Two things are becoming very clear. The capabilities for firms to efficiently and securely conduct voice trading in the cloud are there. Firms are becoming far more comfortable using the cloud to access a virtual trading floor and with storing data there.
However, with the growing appetite – and the need – for cloud-based voice trading capabilities, therein lies a growing responsibility for the technology vendors to continue pushing the innovation curve and fuel the voice trading engine.
The Vendor Responsibility
Much like other areas of the institutional ecosystem, the approach to voice trading has shifted for many participants. Today, working from anywhere is a basic necessity and having access to data from anywhere is critical. The key driver in developing technology that can support these changes has and will continue to be listening to customers and addressing their concerns.
API-based platforms are quickly becoming the foundation for the institutional voice trading ecosystem, allowing third parties to access unique voice data and integrate with best-of-breed analytics and surveillance providers. APIs can also ingest rich sources of data that can help analyze and improve the productivity of traders.
About two years ago, remote virtual desktop infrastructure (VDI) began to gain traction and is now enabling more of a hybrid approach for folks who prefer to share time between the trading floors and a remote work environment. Moving forward, support around VDI and ‘work from anywhere’ will become central to everything in institutional trading.
With a greater selection of collaboration tools available and more ways to talk to customers, technology and structural complexities are inevitable. It is up to the vendors to address these hurdles by integrating data with back-office systems and data warehouses.
Becoming the Industry Engine
Voice trading is not a one-size-fits-all. Customers want optionality and the ability to customize workflows. Some have already immersed themselves in the cloud while others still seek a traditional phone turret experience.
With institutional IT teams focusing more on value-add than just on the overall infrastructure, vendors have to provide sufficient management so that IT teams can more easily and seamlessly implement these solutions into their own systems.
The most challenging part is understanding each customer. There are a variety of trader types and with that comes a variety of different workflows. Vendors that are providing voice trading capabilities need to define each of these workflows and have the APIs to support them.
What is most important is that a cloud-based virtual trading setup looks and feels the same for the users. While firms want options around how and where they can operate, they don’t want their teams needing to adapt to different systems depending on where they are on a particular day.
It is no longer about just providing voice capabilities. The focus now needs to be on providing all the voice trading capabilities customers need in a single, intuitive and interoperable platform that’s secure and accessible from anywhere.
Becoming the voice trading engine for the institutional capital markets will be no small task for any technology provider. But enabling anytime, anywhere access, and delivering the ability to digitize data from any conversation simplifies workflows and provides the actionable insights that firms need in our ever-evolving environment.
To learn more about voice trading capabilities and how to navigate the challenges you may be facing in our current environment, please attend our next virtual roundtable that will be co-hosted with EY on Thursday, July 22 at 10am ET. The event will focus on the importance of voice trading data. More information to come but you can secure your spot by emailing email@example.com.
Last year, our CAO, Brian Hunt joined Fintech Focus TV, where he examined voice trading during the remote working transition. In a recent Fintech Focus TV episode, our CTO, David Midgett offers an exclusive look at what Cloud9 has been up to since then. From exciting technological innovation and exceptional company growth to how voice trading and data capture technology have changed and why the cloud is no longer a “nice to have” but a “need to have” element of an institution’s infrastructure.
As the global pandemic continues to force institutional traders to work remotely, firms need to ensure they have the proper solutions in place to effectively capture, store and use voice metadata – regardless of their location. In the sixth episode of Cloud9’s podcast series examining developments in the voice trading landscape, Cloud9’s Product Manager Alex Francisci, and Intelligent Voice’s Chief Technology Officer Nigel Cannings, examine why institutional traders need to be able to leverage voice metadata to make more informed decisions, especially when it comes to their overall strategy and pertaining to the regulatory compliance process in the new working environment.
One year out from the start of the sweeping COVID-19 pandemic that changed working conditions globally, many firms continue to struggle with how to address the challenges they have faced during the transition, particularly voice trading in what has become a virtual market ecosystem. While every company needs to employ remote working capabilities, there is no question that it is difficult to manage and can create challenges when trying to access and store voice data.
Virtual voice data
There are a number of systems that can capture voice data and many others that can retrieve it, store it, and analyze it. However, there is no single standard defining how institutional voice data needs to be captured. Firms have ample amounts of voice metadata detailing where a conversation began and where it ended, but one of the issues the industry faces is that there is no single agreement on how to represent voice data in a unified way. This has resulted in consumers of that data having to integrate and manage a wide array of unstructured data formats.
As customers became more interested – and in some cases compelled – to capture information from voice communications, it became clear that this issue needed to be addressed.
The FINOS Voice Metadata Standardization working group has taken a number of steps to try to unify the metadata. However, in order for these steps to be enacted and become valuable to users, the standard needs to be adopted across the industry to ensure the process is uniform.
While the simple facet of the equation is capturing and storing voice data in a standard-based method, the more difficult element is transcribing the data and then structuring it so that firms can make more informed trading decisions and leverage it for regulatory purposes.
There are numerous vendors that have expertise in natural language processing (NLP), data structuring, and transcribing data. It will be the responsibility of the producers of such data to make it available via standards-based APIs whereby owners of this data can easily make it available to their vendors.
In the cloud versus on-prem
The next barrier is access to the data. When examining the current situation around structuring data for voice, the lead question must be how comfortable companies will be capturing and storing recordings and metadata in the cloud.
As financial institutions continue to acclimate to longer-term remote work strategies, some are employing permanent work-from-home policies, while others are returning to their offices. Regardless of the approach, the reality is that it will be a hybrid of the two for the foreseeable future. This has resulted in not only an increased appetite for the cloud – but an increased need, particularly in enhancing flexibility and redundancy.
Today, the majority of metadata is captured and stored in on-site facilities. A potentially more effective solution is the use of secure cloud storage. This allows users to access data via APIs making it available to analytics vendors of the customer’s choice and allowing them to leverage the full value of the data.
There are some institutional traders that are generating more than 300,000 recordings per month and are using cloud-based APIs that allow them to perform reconciliation at better than 99.9% accuracy. This provides better accuracy than many on-prem systems. For the first time, customers are approaching vendors for more robust cloud-based voice data solutions as opposed to the other way around. These software-based voice trading systems also provide the compliance features necessary to allow proper trading oversight regardless of work environment.
A software-based voice trading system that can be used from anywhere has become much more than just a “nice to have” – it is now a basic necessity.
Future of voice data
Historically compliance and surveillance have been managed with on-premise solutions. But with new challenges of remote working and tremendous advances in technology, effective cloud-based UCC and voice trading solutions are emerging. This shift has forced vendors to offer products that work as well in cloud settings as they do in traditional on-prem, while enabling a seamless transition to what will be the new normal.
For the first time, firms are more open and comfortable allowing their data – including voice and communication data and disaster recovery solutions – to reside in the cloud. With users that traditionally work both on and off the trading floor distributed across numerous locations, the cloud has become the easiest place to store and retrieve data.
Voice data will be made more accessible and available as it migrates to the cloud allowing owners of data to grant access to best-of-breed analytics vendors. Compliance vendors will use standardized APIs to access that data to provide compliance and analytics capabilities regardless of the location of the systems that are generating the data.
Finally, if an industry-wide standard for the data format is agreed to, producers and consumers of that data will find it far easier to provide value to their customers.
This article was originally published in Traders Magazine.
As the financial industry continues to transition towards a predominantly virtual environment, institutional traders need to be able to easily access the right tools to stay connected and enhance workflow efficiencies. In the fifth episode of Cloud9’s podcast series, Cloud9’s Chief Innovation Officer and Co-founder Leo Papadopoulos, and Chief Operating Officer Jim Miller, examine what voice trading capabilities institutional traders must have in a distributed workplace and how a cloud-based platform can provide a more secure, mobile and accessible ecosystem.