NEW YORK & LONDON -- (BUSINESS WIRE) -- Shrinking budgets are forcing US asset managers and hedge funds to reduce their technology spending, giving rise to the idea of combining order management (OMS) and execution management systems (EMS). Going directly to the buy side to learn if a combined system, or OEMS, could meet their needs, TABB Group surveyed 52 buy-side firms to gauge how they saw current OMS and EMS offerings, including proprietary systems, as well as trends and analysis covering OMS and EMS usage and functionality.
According to Cheyenne Morgan, research analyst and author of new research published today, “Buy-Side OMS & EMS: A Market Snapshot,” TABB learned that half of the respondents were unconvinced about the value of an OEMS.
OMS market share is well established and TABB estimates OMS penetration has reached saturation. However, Morgan, who also co-authored TABB’s recently published benchmark study, “US Institutional Equity Trading 2012/13: The Paradox of a New Paradigm," sees opportunity for OMS vendors to penetrate quant funds, a group that currently relies on homegrown, proprietary order management systems.
This subset of funds has been satisfied with their proprietary OMS but is looking at third-party software due to the increased need for formal audit trails and risk-management requirements. Still, participants of the report point out that installing an OMS is no easy task. “The time and expense required to integrate a new OMS is daunting, making it a long-term investment,” says Morgan, adding, “Over 60% of the firms describe the process of switching to a new OMS as very difficult.”
In commentary on the new report written for TabbFORUM addressing the use of EMS technology, Morgan says the buy side is consolidating the number of EMS platforms from an average of six platforms on the desktop five years ago to one or two today. “Interestingly, those platforms tend to be broker neutral as the preference for EMSs on the buy side shifts to independent providers and agency brokers.”
A sampling of exhibits from the report includes:
The 11-page report on the future of the OMS and EMS market is available now for download by TABB Group Research Alliance Equities clients and pre-qualified media. For more information or to purchase the report, write to email@example.com.
About TABB Group
With offices in New York, London and expansion to Asia-Pacific, TABB Group is the only financial markets research firm focused solely on capital markets, based on the proven interview-based research methodology of “first-person knowledge” developed by founder Larry Tabb. For more information, visit www.tabbgroup.com. In January 2010, TABB launched TabbFORUM, the online global capital markets community covering analyses of current issues, tracked daily by 15,000 professionals.