By Anna Peel. Originally published at ValueWalk.
New Coalition Greenwich Report Breaks Down Buy-Side Technology Spending on Trading Desks
May 10, 2022 | Stamford, CT — Budget increases for trading desks drove buy-side technology spending above $10 billion last year and is fueling fierce competition amongst an expanding host of innovative institutional fintech providers.
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Buy-Side Trading Desk Budget Increase
The average buy-side trading desk budget increased approximately 5% last year, to $2 million annually, according to new data from Coalition Greenwich. Technology accounts for about a third of that spending, with compensation making up the remainder. Looking ahead, Coalition Greenwich projects continued increases in spend on the technology side of the ledger.
“Fintech providers are offering buy-side firms cutting-edge tools to improve the research process, risk management and cybersecurity capabilities, to name a few,” says Brad Tingley, Research Manager at Coalition Greenwich Market Structure & Technology and author of Buy-Side Technology Spending Continues Upward. “To remain competitive, trading desks must make sure they are taking advantage of all the opportunities technology provides.”
Much of last year’s technology spending increase was driven by desks trading fixed income products. While budgets for equity trading desks increased 4%, and foreign exchange desk budgets actually declined 2%, budgets for fixed-income trading desks increased 12% year-to-year.
“This is not to say that technology will be replacing human traders,” says Brad Tingley. “Success today requires having the right people in the right roles—with the right technology at their disposal.”
About Coalition Greenwich
We are a leading provider of strategic benchmarking, analytics and insights to the financial services industry. We specialize in providing unique, high-value and actionable information to help our clients improve their business performance. Headquartered in London, we have 400+ professionals working in London, Paris, New York, Stamford CT, Mumbai, Singapore, and Tokyo.
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About CRISIL
CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets function better. It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint. It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the U.S., the UK, Argentina, Poland, China, Hong Kong and Singapore. It is majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. For more information, visit www.crisil.com
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