About 58 pc brokers to invest in ‘algos’ as part of software spends
| Date :08-Dec-2019 |
Business Bureau :
ALMOST 58 per cent stock brokers will invest in ‘algorithmic trading or algos’ as part of their technology software spends in 2020, which indicates precision and speed in execution of trades will continue to be the focus area for them, a survey by ANMI said recently. The StockTech survey, conducted by the Association of National Exchange Members of India (ANMI) that surveyed around 450 trading members across the country, found that besides front-office and back-office software, other technology software that most brokers -- around 58 per cent -- would invest in algorithmic trading or algos.
This shows “precision and speed in execution of trades will continue to be the focus areas for brokers even as broking services migrate towards automation and Delivery Instruction Slip (DIS) models,” the survey noted. A DIS is used by sellers of securities to instruct their depository participant to debit their demat account. The survey also found that almost 86 per cent of brokers consider technology as an important factor for their businesses by 2020 and 79 per cent of them are currently active investors in technology. However, the survey revealed that despite a large number of brokers facing some technology-related setbacks over the last two years, most of them still did not have a fixed annual budget earmarked as technology expenditure.
More than 72 per cent respondents said their technology spend was ‘as and when required’. This indicates the lack of preparedness among the broking industry players for dealing with the challenges of an ever-changing technology landscape in the industry and their need to keep pace with technology developments around the world. ANMI is an association of more than 900 stock brokers from various stock exchanges including BSE and NSE. Commenting on the survey, Ashishkumar Chauhan, MD and CEO at BSE said, “Stocktech is organised keeping in mind the ever increasing need of the stock brokers to keep abreast with the latest technology available in the market to augment their businesses.
The Indian capital market and stock broking space is at a transformative juncture with a lot of emphasis on safe, responsive, cost effective and dynamic stock broking”. The rapid expansion of networks and technologies has led to the emergence of cybercrime, due to which it has become important for firms to counter likely cyber threats and invest in technological infrastructure for enhanced performance and cybersecurity, he added.