Covid-19 Reveals Need for Better Comms Plug-Ins for Traders

For traders working remotely due to Covid-19, one of the big adjustments they are having to make is operating without the hustle and bustle of the trading floor. For many traders, working in the office is about more than just social interaction; it’s a place where they pick up tips on trades and update colleagues on their transactions.

Microsoft Teams and Zoom are easily available, as are trading systems for remote use, but these cannot replicate the personal chemistry of the trading floor. Traders simply don’t log on to Zoom all the time to report every trading move. This is why Neil Bond, former head of trading at Ardevora Asset Management, says trading tools could benefit from the ability to make detailed notes.

“Every time you make a decision, if you can have an audit trail of why you have made that decision, and then other people can see that from where they are, that would be a very useful tool. You are being held more accountable for trading decisions, and proving best execution,” Bond says.

These notes could also help with tasks such as transaction cost analysis (TCA). If a more senior colleague makes a query three weeks later about a trade, for instance, there would be notes in the system that are linked to it.

Bond says that when making trading decisions, some systems allow users to click on an order and make a note while others do not. “When you’re working remotely, that part of the job is more important. So the ones who don’t have that capability need to have it,” he says.

Many of the execution management (EMS) and order management systems (OMS) used by traders have been built with the office environment in mind, and the industry is now grappling with how these systems can be adapted for remote-work settings so that the authentic communication flow of the trading floor is not lost.     

While writing notes can be useful for keeping colleagues updated with trading decisions, doing so can be time-consuming. Mark Montgomery, head of strategy and business development at Big XYT, says that while some OMSs provide a field for the user to type in instructions, it is not necessarily a natural workflow.

“You could capture a dialogue where, let’s say, a fund manager is giving instructions to the trader, and the trader wants to have a quick word with the fund manager about whether he or she thinks that is the right thing to do at this point in time because of other information. It is quite a lot to type all of that out.”   

Tech Integration

Montgomery believes integrating different technologies could be the answer, with fund managers using a solution that combines a messaging service, such as Slack or Bloomberg Chat that links the timestamp on messages between a trader and fund manager with the OMS, or, even better, verbal instructions could be recorded as soundbites.

“You could say, ‘I am doing this because the oil price is rising and I need to be more aggressive with my order. That’s why I have taken this decision.’ That soundbite could then be timestamped, along with the instructions, to give a greater audit trail in the decision-making process,” he says.

Montgomery says having a voice plug-in on a trading platform would provide an extra layer of voice recording. This would be helpful when communicating with colleagues and keeping tabs on activities for compliance purposes, but it would have to operate between the fund manager, trader, and even third parties such as a broker.

“Whether that comes from the OMS or the EMS they are trading with, or whether it is linked to the internal telephony the users are choosing to speak over, I am not sure what the right answer is. If it was the latter, it would be more complex, because it is quite hard to dictate what mechanism a firm uses internally as well as externally.” 

Jim Miller, chief operating officer at communications specialist Cloud9, agrees that voice capture should be integrated with the trader workflow. His firm already provides a recorded product, so traders’ conversations are captured. He says the question of capturing trader voice was being discussed even before the pandemic.

“Voice is just an extension of what you do normally. In the past, the way traders have worked is they have the phone off to the side and they have their desktop in front of them with all the market data in their trade capture, and all of that. And those two tend not to interact at all,” he says. 

Miller says the firm has no immediate plans to offer voice products that are fully integrated with an OMS or EMS to enable instant recorded voice communications while trades are being conducted. But, he says, “We are definitely looking at that actively.”

First, he says, there needs to be a standard for the data elements that have to be provided to an OMS or trade capture system, so that chat and voice transcription tools can feed directly from the data they capture into those tools.

Also necessary for such products are flexible, accurate transcription models that can handle different asset classes, accents, and languages, as required.

Cloud9 has been working with partners such as GreenKey Technologies and Intelligent Voice in the area of speech to text. “We feed the audio stream down to the transcription engine and transcribe what was said, and then have a record of that in text, not just an audio form,” Miller says.

He believes Covid-19 will hasten the need for better transcription models as manual review of the transcriptions is sometimes necessary, and models need to be trained to understand what a trader is talking about. 

“If your goal is just to communicate with everybody else on the desk what the market sentiment is, your review doesn’t have to be as thorough,” he says. “If you want the voice transcription to enter a trade or an order into either your order management system or your trade capture system, then you’re going to want to make sure you review it very closely.”  

Cloud9 also partnered with messaging service Symphony earlier this year. 

“A lot of what was originally planned in January and February has been derailed or altered quite a bit by the pandemic,” Miller says. “But my view is that voice needs to be integrated with the trader workflow. And it’s important that you do everything possible to make it so it’s natural.”