Beware the Millennials blocking the use of trading technology
Turns out it's not just old-school traders who have their doubts about the use of technology on the trading floor. A new study by research firm Greenwich Associates suggested Millennials - aged between 23 and 38 years old -have their doubts too. Curiously, some of technology's biggest supporters are Gen-X, aged between 39 and 54.
The study, which was conducted online in April 2019 with 106 capital markets (sales and trading) professionals globally, (on the buy-side, sell-side and in consultants and vendor companies), found that 28% of Millennials thought technology made markets "overly complicated" compared to 14% of Gen-Xers and 22% of Baby Boomers.
Similarly, 84% of Gen-Xers thought new technology made markets more efficient compared to only 79% of Millennials.
The study suggests, then, that prejudices about younger people being more open to the adoption to new technology are precisely that. Greenwich doesn't speculate about why some Millennials are averse to new technology, but it might be supposed that they can see their careers being disrupted in the near-term and are less well-positioned to navigate this than the Gen-Xs above them.
Greenwich's survey comes as electronic traders and technologists are increasingly complaining that banks' trading businesses are run by old-school traders with an innate interest in protecting their jobs and those of their longstanding colleagues. Some banks are attempting to circumvent this by changing trading leadership or elevating the status of technologists on the trading floor, with varying results.
The Greenwich survey also suggests a hard time is coming for risk management professionals in banks. Real-time risk management systems are expected to be extremely or 'really very' impactful in the next five years by 96% of Millennials and 70% of Generation Xers.
Given that Millennials will be increasingly moving into management roles, risk professionals might want to take note. The more that trading is done electronically, the more that risk management will be undertaken by algorithms too. Traditional risk managers' days are limited.
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