The much anticipated day when certain swaps will be required to be traded on electronic platforms, or Swaps Execution Facilities, is now here. For swaps, today marks the start of a new phase of evolution. Like any evolution, how quickly change occurs will depend on a variety of environmental and behavioral factors.
Will equity research analysts evolve into data scientists, applying big data analytical tools to model markets and stocks? According to an article on Tabb Forum, they will if they have good survival skills.
Big data has been the rage for years now but it tends to have the reputation for being more of a middle or back office type of technology. The idea that massive amounts of data crunching can yield new business insights is appealing. The image that comes to mind is that these insights are uncovered by powerful computers conducting computationally intensive analysis in remote data centers.
One lesson learned from the Target credit card scandal is that hacking, once perhaps considered primarily an IT problem, has now been elevated to a business problem. This is highlighted not only by the costs of the Target scandal, but by the sophistication of the cyber-hacking techniques and the evidence of pre-meditated criminal strategy employed by the perpetrators.
The OTC swaps markets spent much of last year preparing for a trading revolution. News reports indicate that the revolution is about to begin.
About a year ago, there was a lot of buzz around the idea of "The Great Rotation" when investment would rotate out of low-yield bonds and into stocks. That movement doesn't seem to have occurred in the massive form that the name "Great Rotation" implies, but what if some event spurred a lot of reshuffling of investments around the bond market? From a post-trade perspective, it could get messy.
Welcome to a new year of FierceFinanceIT. We are looking forward to continuing to watch many of the big stories of 2013 that will continue to grow and develop in this new year – the emergence of SEFs, the effects of the Volcker Rule, the bond market's various efforts to find new ways to embrace electronic trading, to name a few.
Beginning in January, 2014, FierceFinance will become part of FierceFinanceIT. Technology drives an ever-increasing portion of the investment, trading and asset management sectors. We're following suit, increasing our focus on IT operations across the financial services industry.