FX execution management systems: room for improvement
US users see weaknesses in transaction cost analysis and order management integration.
FX execution management systems (EMSs) have generally stood up well during the coronavirus pandemic, not least because of their ability to deploy algorithms during periods of high volatility. But according to research by The Finance Hive, a networking organization, North American buy-side EMS users are not entirely happy.
They are not satisfied with order management system (OMS) integration and the availability of transaction cost analysis (TCA). Smooth OMS integration matters because of how much asset management workflow relies on feeding data between order and execution management systems.
“During the March madness in the markets we saw significant problems caused by weak integration between EMS and OMS,” says Brad Bailey, research director at Celent, a technology consultancy. “Depending on the type of integration and the use of disparate systems, the explosion in volume caused delays in getting position, increased risk and limited information.
“In a time of rapid consolidation of FX trading technology, this is a key priority.”
Respondents to The Finance Hive’s survey also said they wanted to see TCA transformed from a box-ticking exercise into a tool that adds real value to the execution process.