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Technology / AI and automation

BIRTH OF 24-HOUR TRADING CREATES ENORMOUS NEW DEMAND FOR COMPUTER POWER

While the major players in the City are still totting up their sums to establish the additional computer power they need in the wake of Big Bang, globalisation of stock and bond markets is also putting pressure on Wall Street brokers and banks to put their back offices through a dramatic redesign to accommodate the new 24-hour trading environment, reports Institutional Investor magazine. Old, batch processing systems cannot function in a world of 24-hour trading, so many firms are taking the first steps in bringing a new generation of systems for real time operation. Over the next few years, manufacturers say, billions of dollars will be spent for the new trading and accounting systems. One of the new entrants in the global book software business is General Motors’ problematic Electronic Data Systems acquisition. EDS recently took a licence the TAPS Trade Analysis and Processing System developed by Morgan Stanley, at a cost of $30m over the past seven years. TAPS was written in Natural and is built around Software AG’s Adabas database management system, and EDS’s first customer is no less than Citicorp. Currently about a dozen firms have a real time system for managing their traders. Monitoring risk exposure and inventories of stocks, bonds and currencies will enable investment bankers and brokerage firms to pass the book – transfer the day’s trading inventory at the end of New York’s trading day but before Tokyo begins the next day’s. Paul Rachel, president of Internet Systems, one of the entrants into the global book software market, estimates that the market for the system exceeds $3,000m. It includes the top 300 banks plus hundreds of brokerage firms and investment banks. Other global book software developers include Management Technology, and Financial Trading Systems Inc, while two Wall Street firms, Shearson Lehman American Express and E F Hutton, hired Cytrol Inc to write global systems for their back office trade processing.

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CBR Staff Writer

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