Expanding Technology Budgets Paid Off For Buy-Side Trading Desks In Volatile 2020

Expanding Technology Budgets Paid Off For Buy-Side Trading Desks In Volatile 2020
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June 2, 2021 | Stamford, CT – Buy-side organizations increased trading desk budgets by 7% amid the tumult of the COVID-19 crisis last year.

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With traders forced to migrate trading screens to living rooms, bedrooms and home offices around the world, buy-side firms directed more than 40% of that amount to technology. Despite skepticism about the efficacy of trading away from the bustle and rigorous infrastructure of the trading floor, the shift to trading from home went off mostly without a hitch.

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Growth In Trading Desk Budgets

“That success can be attributed in part to the continuous increase in technology investments, which have been growing as a share of overall trading desk budgets since 2015,” says Brad Tingley, Research Manager in the Coalition Greenwich Market Structure & Technology group and author of Buy-Side Trading Desk Budgets in 2021: Technology Pays Off.

The report presents the results of the annual Coalition Greenwich Market Structure & Trading Technology study in which 418 buy-side traders across the Americas and EMEA were interviewed in the second half of 2020.

The study results show that the typical buy-side firm spends $2.45 million per year on their trading desks, including staffing and technology. Furthermore, the average trading desks includes 6.5 traders, roughly flat from 2019.  On a year-over-year basis, the biggest increase in overall budget came in equities, which grew by 12% while average trading desk budgets for fixed income actually declined by about 1%.

Market data terminals represent the single biggest technology cost for buy-side trading desks overall, consuming 35% of the technology budget. On equity trading desks, however, the largest tech expenditure is for order management systems, which comprise 27% of average technology spending.

About Coalition Greenwich

We are a leading global provider of data, analytics and insights to the financial services industry.  We specialize in providing unique high value data and actionable information to help our clients improve their business results. The firm’s data and analytics provide a clear, actionable picture of businesses and markets and are valued by boards, strategy teams and top management at leading financial services institutions.

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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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