Plotting the future of hedge fund technology

Investment Technology

Plotting the future of hedge fund technology

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Last week, I spoke on a panel at the HFM European Technology Summit about the future of hedge fund technology. A great event and opportunity to hear first-hand from hedge fund CTOs the issues impacting their technology teams and areas of focus for this year. Here’s a summary and our take on the topics discussed.

Key themes

  • How hedge funds are increasingly putting technology at the front of their relationship with clients
  • Tech teams of the future
  • Agile working
  • On-boarding data sets quickly
  • Open source as a force for good
  • Predictions – Blockchain, data virtualisation and Quantum

Client collaboration

On a journey to building more productive partnerships with their clients, funds are looking to put technology front and centre in their relationship. This is interesting because it puts data in the spotlight – how can funds differentiate themselves by what they can deliver on the data side? Can they help their clients more efficiently onboard data when they need it? And how does technology help funds and their clients to drive productivity?

Tech teams of the future

Everyone is looking for creative developers and competing for the same talent. It was interesting to hear openness, community and meetups all cited as important attributes. At FINBOURNE, openness is central to everything we do – from our open platform, to sharing our methodologies, processes and contributing to open source software. For us, openness is fundamental to changing the relationship with clients. You can help us on this mission by being open with us: contribute to our code on GitHub, and tell us what works and what doesn’t. That way, we all benefit.

Agile working

We love a two-way conversation with our clients and prospects. If the industry is to move away from woefully expensive and time consuming 18-month Proof of Concept (POC) projects, we need to work in an agile manner with each other. That’s why we employ two-week POC’s as a standard, with joint, virtual teams and daily stand-ups. We take clients’ top 10 issues and seek to solve them together, so progress and empowerment go hand-in-hand.

On-boarding data sets quickly

We talked about future-proofing technology teams and the technology offerings funds provide to clients and it all came back to access to data. How do funds give clients better access to new data sets more quickly? How can their PMs have access to information more quickly? Funds have always sought an advantage and the availability of increasing digital information is one such route. How quickly new data can be on-boarded, analysed and interpreted is proving to be a key area of differentiation.

Open source as a force for good

In our view, it will become increasingly difficult for funds to avoid using open source technology. Whether that’s funds using sandboxes internally so developers can download specific tools open sourcing certain software and inviting collaboration from the developer community. Provided you have the necessary precautions in place (network scanning etc) open source is a perfect fit for the ‘non-differentiating’ technology functions.

Predictions: Blockchain, Data virtualisation and Quantum

There’s no question blockchain has huge potential – it’s been called the saviour of the asset management industry, a transformer of clearing and settlement in the cash equities market and a catalyst to improve the lending market. But it’s most certainly over hyped. Instead, we see data virtualisation growing as more funds use it to combine disparate sources and do real-time analysis in a safe way. Quantum is on the rise and despite its lack of proven use cases in the financial services industry, we’re starting to see many funds seeking to partner with technology companies to harness its potential.

We’re headed over to Paris in April for TradeTech where we’ll be speaking at its ‘Data Science in Asset Management’ day. We’ll be sure to share our takeaways following the conference. If you’re planning on going, get it touch!

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Thomas McHugh



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