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Bloomberg survey shows COVID-19 accelerating APAC buy-side automation

Nearly a third of buy-side fixed income traders surveyed view implementation of a rules-based trading automation as their first or only priority for 2021, with Australia and China deemed most ripe for automation in the region, according to the report


Under conventional market conditions, the adoption of automation technology is more of an evolutionary process. Typically, organizations will adopt electronic trading as a pathway to process optimization by testing a range of new tools and technologies. However, the onset of COVID-19 has been the catalyst for a global wave of digital transformation on the buy-side as a result of a shift to working-from-home. Consequently, the pace of technology adoption in the fixed income market has been vastly accelerated, with increasing flexibility the catalyst for technology implementation.

While working remotely, buy-side traders embracing fixed income trade automation in this new environment have gained a competitive advantage. Automated routines to handle smaller and more time-intensive trading activities have helped traders achieve greater freedom and focus their efforts on more complex trades that deliver greater value. Respondents in this report were also asked in the survey for their views on rules-based trading automation, electronic workflow solutions for interdealer markets such as those in Korea and India, ETF portfolio management and their priority on All to All liquidity pools to aid with illiquid bond trading.

Choice of Trading Venue and Electronic Trading Priorities

Of the 100 Heads of Fixed Income Trading, Heads of Trading and Heads of Technology from Singapore, Hong Kong and Australia polled by WBR Insights in conjunction with Bloomberg, 29% view a maximum consolidation of tradable products on a single platform as their first or only priority. Only 15% prefer to choose the best of class in each individual product across multiple platforms. In addition, 29% of survey respondents also cited rules-based trading automation as their implementation priority, for its ability to handle low-touch trades and free up trading time for high-touch orders. However, the survey also revealed that buy-side firms in APAC are largely resistant to changing the status quo on their preferred trading venue. 76% of those surveyed expressed that, “We will use whatever [platform] is available, and have no desire to want to drive change.”

“As you might expect, buy-side firms are cautious about venue selection and adding new venues to their existing workflow is something that requires a reasonable amount of due diligence,” said Ravi Sawhney, Head of Trading Automation & Analytics at Bloomberg. But “Clients unsurprisingly value the breadth of products offered through a single venue, so they can maximize their integration efforts,” he added.

The Future of Asian Electronification

Over the course of the next few years, a substantial portion of the global workforce may do their jobs from home, despite a gradual return to offices. This transition will require buy-side operators to increase the percentage of trades executed automatically when working remotely. A flexible and remotely accessed trading system will therefore likely continue to be an important factor for traders in the near future.

In Asia Pacific, the markets deemed most ripe for electronification in the survey include China, Korea, Indonesia, Japan, Australia, Singapore, Hong Kong, India, Malaysia, and Thailand. Of the respondents, 20% favour Australia the most in this regard, closely followed by China at 19%. Hong Kong (15%), Singapore (14%), and India (13%) are also high on the regional list. To compete effectively in global markets, adoption of technology is vital where FX, equity, and fixed income trading have all become extremely competitive. However, the survey did indicate a slow pace of technology adoption in Asia Pacific, with 47% of the respondents feeling that compared to their peers in the US, Europe, the Middle East, and Africa, APAC is automating less than other regions.

“Executions desks are having to become more industrialized to compete in a more digital world and electronification and automation are both requirements to achieve high degree of industrialization,” said Ravi Sawhney at Bloomberg. He added, “What we expect to see in 2021 is increasing use of data and derived analytics to help fuel the growth in these trends. Traders will spend more time using sophisticated TCA products to evaluate the performance of their automation setup with a view to optimizing pre-trade rules to improve best execution for their clients.”

To find out more about Bloomberg’s fixed income and buy-side solutions, please visit and or request a demo.

Click here to read the full report on Buy-side Fixed Income Trading in Asia: A Closer Look at Electronic Trading Priorities. To read about fixed-income automation trends on the sell-side, please refer to this report.

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