Jesse Forster is Head of Equity Market Structure & Technology at Coalition Greenwich.

What were the key theme(s) for your business in 2023?

Workflow automation was a huge focus for many in 2023. This includes optimizing trade automation with tools like AI and algo wheels, integrating systems and technologies, enhancing operational reliability, and leveraging outsourced trading desks for the buy side or outsourced algo and tech stacks for the sell side. With the ongoing pressure to accomplish more with less, automating workflows proves to be an effective strategy when implemented thoughtfully.

What surprised you in 2023?

Our research found that approximately half of the buy side is still grappling with challenges related to hiring and retaining desk talent. This dynamic is intriguing, especially considering the number of resumes we receive from highly experienced but currently unemployed financial professionals. Despite this, there is still a persistent industry-wide movement towards juniorization, even though most seasoned trading desk professionals are not expecting, nor requesting, the compensation levels of the past.

What trends are getting underway that people may not know about but will be important? / What industry trends have been prominent but are now fading (or will soon fade)?

The traditional decision-making process of choosing between buying or building trading technology is rapidly giving way to a more comprehensive approach—buy, build, and integrate. This method is gaining popularity among both buy and sell-side firms, where they combine pre-built platforms from external vendors with their own internally developed proprietary systems. While the early 2000s witnessed a surge in third-party providers promoting the purchase and customization of vendor technology, the evolving business landscape has led successful firms to adopt this hybrid approach. This strategy offers greater control, flexibility, and adaptability while simultaneously reducing overall development time and costs.

What are your customers’ pain points and how have they changed from 1 year ago?

Accessing liquidity in fragmented markets is a perpetual challenge. In equity markets, this hasn’t changed since the implementation of Reg NMS almost 20 years ago, and for some is only getting worse as the number of exchanges and ATSs increases. More recently, operational reliability (including mid/back-office settlement issues) has also come up, particularly when trading global equities. And as mentioned above, the buy side is also struggling with hiring and retaining trading desk talent, perhaps a reason there’s so much focus on trade automation and outsourced trading, two potential solutions or tools they can use to alleviate headcount shortfalls.