The call for unified communications is too loud to ignore
28 May 2010
By Thierry Charvet,
Orange Business Services - Trading Solutions
Unified communications sounds complicated. But in principle it is very simple and hinges on two factors. Firstly, a trader must be able to switch seamlessly from one communication channel to another. Imagine an employee is on the phone and decides to speak to a colleague face to face. It involves a simple process of just clicking an icon then the conversation immediately shifts to a screen on a workstation. Secondly, a truly unified communications system will automatically direct the caller to the most appropriate channel. Log off an office network and a call goes through to a mobile - without the need to set up manual call forwarding.
This flexible and intuitive approach to unified communications makes it highly suitable for trading rooms. In addition, it reflects the industry’s shift from a focus on transactional business, which has always been supported by traditional voice and turret based communications. But today, commoditised transactions are largely automated as the focus has switched to instruments. Traders focusing on complex instruments such as derivatives are turning to communication channels such as instant messaging (IM), which are familiar in the mass market, but less so on the trading floor.
From chat rooms to trading rooms
So why are traders turning to a communication channel that originated alongside chat rooms? In fact the reason that IM functions so well is due to it being a great tool for communication at the start of the trading cycle. If a trader wants to find out the price of different liquidity pools from a dozen or more contacts, rather than call each one individually, IM can be used to check who is available while also sending a group message exploring the depth of the market. Equipped with a short list of perhaps three prices, the trader then moves to a traditional voice turret to speak to the shortlist of contacts in person. IM is perfect because it supports communication in real-time or near real-time, rather than email where people tend to respond every hour or so or longer.
In fact IM is the perfect starting point for a discussion around unified communications on the trading floor because it highlights many of the opportunities for traders, as well as offering a strong reminder of issues, including compliance, associated with a new communications channel.
On the one hand, IM offers flexible fast communication. On the other, it also indicates whether someone is available or even the best way of contacting them at any point in time. A truly unified communications solution also enables the end-user to switch seamlessly from one channel to another so that a trader can escalate a conversation from text, to voice or even a video conference. At the same time, IM also supports compliance. This is not just because most systems now record written conversations, but because institutions can better comply with the need to prove best execution under MiFID.
Unified communications is helping the financial services industry evolve beyond a focus on instruments towards a new approach that centres on communities. It helps to create networks and layers of communication that map to day-to-day trades.
A triple win
There are three areas where unified communications has the potential to increase business performance. Firstly there is the opportunity to improve overall productivity, especially if unified communications is integrated with an existing CRM system. In this scenario, a window pops up with the client’s profile, recent spending pattern and risk adversity. Sometimes the challenge is that there is just too much data, but once a system that automatically pulls up the client information needed is utilised, productivity increases enormously.
Unified communications also supports greater collaboration between traders and analysts. Take the example of a morning briefing where an analyst describes pricing trends and advises the sales team on the day’s strategy. With unified communications, the briefing is recorded and automatically sent to those who cannot attend the call. There is no need to send notes or the sound file manually. Time savings as well as better sharing of information can make an enormous difference to sales performances – and the efficiency of analysts.
Then there is the eye-opening potential of unified communications to draw connected people into a real time conversation. Imagine if a trader could be automatically notified when a call that impacts their business comes to a sales colleague, which would enable themto intervene if necessary. That becomes possible with solutions that are on the market today. The transparency of communication that can now be achieved between front, middle and back offices holds immense potential for the trading business.
One of the main strengths of unified communications is that it provides a trader with a single identity that is recognised by their network, colleagues and counterparty organisations. It takes all those identities and passwords and combines them into a single entity – the trader themselves.
By replacing fragmented identities with one, employees on the move can use mobile devices or home landlines to participate in business while still complying with regulations that govern the recording of trading conversations. When a call is diverted away from the workplace, it is still recorded at the turret. Once again, it is a completely seamless and secure process.
Leading the drive to operational efficiency
The good news for the IT team is that a unified communications strategy fits perfectly with the overall trend towards growing use of session initiation protocols (Sip), which have the potential to support every communication channel from voice to video to email. By implementing a solution that supports computer telephony integration, there is an enormous opportunity to simplify infrastructures and drive down costs.
A more simple approach also means that it becomes easier to enforce security protocols and policies, whilst at the same time opening up the door to further operational efficiencies based on distributed networks, server virtualisation and cloud computing.
Whichever way this trading solution is viewed - from the front to the back office, from the boardroom to the IT team - unified communications answers many of the critical challenges that face trading institutions in the early twenty-first century. It offers more transparency, clearer messages, greater accountability and lower costs. Put simply, it is an essential platform for success in the coming decade and beyond.