GT was in Amsterdam this week for the Fixed Income Leaders Summit.
Here are some of the themes that emerged from panels and in our chats with the industry.
Bond traders are squeezed.
Margins are thin, regulation is relentless, and volatility is unprecedented. Bond traders are looking for ways to reduce costs.
No wonder the emphasis on artificial intelligence (AI) at this year’s FILS. AI is one possible route to streamlining workflows — though the quality, reliability, and cost of the data these models need remain in question. Auditability, also, is important to assuage regulators’ worries.
The squeeze is also driving lower-touch trading. Even in Europe’s fragmented trading landscape, bond traders are turning more to execution management systems to stream prices and execute with the sell side.
Fixed income is still a relationships business.
With this in mind, it’s unsurprising that FILS was more than ever dominated by discussions about automation and AI. But the sentiment that arose repeatedly in panel discussions and on the exhibition floor is that fixed income remains a human business, true to its roots in voice, and there is a ceiling on how much of it can be automated.
Automation in this business is not a matter of human versus machine, but human aided by machine, with tech at its best amplifying relationships rather than replacing them.
Not everyone wants a consolidated tape.
The saga of the fixed income consolidated tape took another twist recently, with the EU tape provider filing a lawsuit against the Financial Conduct Authority over the UK’s bidding process.
FILS gossip made it clear, however, that the tape still faces more existential opposition from those who fear it will erode their bottom line. Critics like data and software providers say the tape risks flattening a complex data ecosystem that, while imperfect, incentivises innovation in the provision of market intelligence.
According to these critics, the tape commoditises data that some firms have invested heavily to collect and normalise, and by levelling the playing field, essentially punishes market participants who have invested in their data infrastructure.
Ask a journalist:
What were your FILS 2025 highlights?
Natasha Cocksedge, reporter at The Trade answers
Read coverage from Natasha“FILS was nothing short of a whirlwind few days!
“What really stood out to me is the notable increase in discussions around how the industry should tackle automation, electronification and digitisation, and the importance of ensuring these are understood as different from one another.
“Some buy-side recognise the value and importance of automation, but also stressed that the time saved from automating processes must be used wisely across the industry; that discussion then trickled down to more in-depth analysis with vendors and sell-side participants.
“Topics like the consolidated tape, liquidity provision and maintaining human relationships were also highlights for me, and I’m looking forward to seeing how the discussions that took place over the last few days translate into the industry over the coming months and years.”
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