Collaborating for success in trading

The adoption of collaborative applications within a financial institution can present compelling benefits and significant challenges. These applications are gaining attention in the financial sector due to their promise of enhancing productivity for the trader, profitability for the business and customer retention. But the road to collaboration can be fraught with pot holes. Financial institutions are now more painfully aware than ever, that as they travel this road, extra vigilance is needed to guard against emerging information security and compliance vulnerabilities. To complicate matters further, institutions can potentially face internal barriers to adoption. Cultural challenges can exist within an organisation undermining the adoption and ultimate effectiveness of these technologies.

Collaboration can be used within the trading floor environment to strengthen the effectiveness and productivity of individual trading groups. Here it is essentially to enhance the trader’s work flow and maximise the profitability of trades for the organisation. Web-based applications can enable traders to instantly share charts, analytical information and strategies with their colleagues. These applications can be developed by using powerful web services that facilitate the exchange of information between different applications. Technologies such as WSDL (Web Services Description Language), REST (Representational State Transfer) and SOA (Service Oriented Architecture) promote an environment whereby disparate applications can be integrated into a holistic financial trading ecosystem.

When faced with unpredictable markets, collaborative tools can accelerate the flow of valuable information and help traders make better, more timely decisions that can ultimately result in more profitable business for the organisation. Additionally, they can enable knowledge workers and traders to work more effectively from remote offices or from disaster recovery (DR) facilities.

Financial institutions can also leverage collaborative applications with their clients as a way to cement stronger, more persistent business relationships. Increasingly, the strength of these client relationships can serve to differentiate one institution from another.

Along with the flexibility and power associated with collaborative applications come a host of inherent information security and compliance challenges. For many financial institutions, appropriate security and compliance policies must be developed and proven to be absolutely robust in order for these technologies to be deployed. Keeping sufficiently ahead of the curve in this regard can be a significant challenge.

A further barrier to adoption involves the internal culture of an organisation. Some institutions may openly encourage internal competition amongst traders. In this type of environment, traders may not be inclined to collaborate with their colleagues or share valuable information as it could undermine their individual competitive edge. Although the senior leadership ultimately needs to change this type of cultural challenge, it can potentially take considerable time to address and is not typically remedied by a quick fix.

Whether collaborative applications will be adopted by trading firms is no longer really the question. The debate has shifted to how they should be engineered into these organisations.