Mobilizing Applications for Hedge Funds
Customization, interoperability and the user experience have held most hedge funds back from making their order management systems (OMS), market data and position information available on mobile devices. The result is that hedge fund managers have been caught between a need to get out of the office to build and maintain client relationships in a commoditized market, and resigned to the need to stay at their desk in order to access the data needed from multiple systems and sources to support a typical day of client meetings, investor calls and internal reviews.
But all this has changed.
Technology to support the productivity of hedge funds has made a major leap forward this year, with the introduction of mobility tools designed to meet the needs of this demanding marketplace. But producing a single, integrated and, most importantly, robust mobile application has its challenges.
Below, Brian Macallister, product manager at Pyxis Mobile, a Waltham, MA-based provider of wireless software to the financial services industry, explains how a BlackBerry® solution and Pyxis Mobile can help hedge managers and analysts cut the tether and get out of the office and into the field — with virtual real-time access to research, market data and intra-day P&L to effectively manage their strategies, portfolios and trading activity from any location.
No Trivial Task
by Brian Macallister, Product Manager, Pyxis Mobile
Laptops, which only a few years ago were rolled out to users across the industry, have largely failed to un-tether financial professionals from their desks. The size and weight of laptops makes them awkward to use on the go, and with system startups taking so long, solutions have continued to take a back seat to notes and frantic phone calls to assistants.
The result has been a reliance on desktop systems, eliminating the ability to be away from the office. The average day of a hedge fund manager begins at around 6am and ends at 9pm. It includes early morning and end-of-day market and news reviews, team meetings, client conferences, prospective investment calls and general administration. Due to the diversity of these activities, and the perceived complexity of information management required to be productive, many of these professionals have resigned themselves to working from a single location, presenting an impersonal face to the critical business partners – both clients and investments alike – that come together to make the firm successful.
The information compiled by hedge fund managers over the course of the day comes from a number of systems including internal and external portfolio management, accounting, CRM, external market data providers, internal and external analysts, and news outlets.
Making this information available in an ‘instant-on’, highly-portable and secure format is a challenge that has, until now, prevented firms from realising true mobility. The proper organisation and presentation of data allows end-users to see the critical information necessary to be productive, without creating information overload. The balance of what to show versus what not to show separates the good solutions from the bad.
Any successful mobile solution must address four critical components: presentation, performance, security and support. The ideal wireless hedge fund solution would include a user experience only achieved by a thick client application on a mobile device, combined with the ease of support and deployment that only a browser-based application can provide.
Some of the hurdles within wireless solutions are concentrated around meeting the needs of each fund and extending their existing systems and business logic in a wireless environment. Similar to desktop applications in this area, there are no ‘one-size fits all’ mobile solutions. In fact, mobility needs for hedge funds require even greater flexibility and customization than traditional mobile solutions. In other industries and sectors, workflows and presentation of data vary slightly, while one hedge fund to another quite often varies drastically with their unique workflows and tailored views. This extends not only to the way data is presented to the user but how and what business logic is applied to each mobile request.
Hedge funds have spent significant amounts building out their trade practices, OMSs and decision support tools. These systems contain business logic that cannot be compromised in a wireless environment. Any wireless solution considered must be able to extend their existing systems while maintaining data integrity – regardless of the access point. The breakdown of this methodology does not lie solely in the hands of the mobile providers. Ideally all OMSs and decision support tools would be interoperable and easily accessible from a third-party solution; however, this is not always the case. In fact, a number of proprietary systems and third-party solutions have not opened up their business logic and data for external communication. Systems like Microsoft® Excel, Eze Castle, Charles River Development, Advent, Beauchamp, Reuters and Dow Jones have made significant strides in re-architecting their environment for external access.
Mobile solutions are looking to one integrated wireless solution. Wireless solutions are not new to the hedge fund community. In fact, market data providers and point-to-point solutions have been launched and re-launched over the years with limited success. These may be fine when the mobile user has a specific business problem to solve and is willing to see only one system’s data in a canned fashion, but hedge fund users have three or four displaying a different application on each. One screen may contain Microsoft Excel displaying intra-day P&L, another displaying open orders, the third displaying market data with instant messaging, while the fourth may display Outlook® or IBM® Lotus Notes®.
Future wireless solutions are likely to consist of a single, integrated application accessible through a mobile device, allowing users to view their existing P&L systems integrated with their market data on a single screen presented by the mobile device of their choice. The value of an integrated and customizable solution within the investment management community extends beyond just the hedge fund managers and traders. A system such as this would allow:
- Portfolio managers and traders access to P&L reports, market data and trading
- Institutional sales associates access to holdings and CRM
- Chief compliance officers access to compliance violations
- Head traders access to trade reports, unattended orders and Fix alerts
- Firm-wide disaster recovery or business continuation Alternative
Without the introduction of high-speed carriers and a general focus on improvements within data networks, there would not be a mobile solution suitable for the hedge fund community. This is a significant technology shift for most mobile solution providers in the way data is stored and delivered to mobile users. Any significant delay of data delivery is considered outdated and useless for evaluation and decision support. Acceptable response times for hedge fund users within a wireless environment stands at around five seconds. This requirement alone prohibits certain technologies being widely adopted within this space.
Regardless of the wireless solution considered, security of client data and adherence to trade regulations are of utmost importance in a wireless environment. With the advent of push e-mail, mobile data services through BlackBerry® Enterprise Server, virtual private networks and the internet, hedge funds have grown accustomed to the means by which data is exchanged within today’s wireless environment. Security extends beyond data delivery – authentication and authorization need to be considered and handled in a manner that is acceptable to the firm’s policies and security regulations. There is no room for security shortcomings when considering a wireless strategy.
Support is key
Given the unique needs of these hedge funds, a number of firms have attempted to develop their own wireless solutions, initially meeting and in some cases exceeding the first three components necessary for a successful mobile solution – presentation, performance, and security. However, these solutions often lack the fourth critical component: support. Unlike desktop deployment, deploying and supporting any mobile or wireless solution is not a trivial task. With all the operating systems and devices offered by carriers, there are no standard deployment methods that can be undertaken universally. Initial deployment of a solution onto a device is just the beginning of the headaches that occur with maintaining a mobile solution; bugs are identified, screens need to be adjusted to fit different devices, and navigations will change per user or user group. The future of wireless solutions regarding support and deployment is likely to involve vendors dynamically changing thick client applications, allowing funds to tailor their deployed wireless solutions after they are installed, without a redeployment or user interaction. Screens and deployed applications will change accordingly.
In today’s market, where information is becoming commoditized, hedge fund managers are encouraged to get out of the office and into the field. In doing so, fund managers must have constant access to real-time research, market data, intra-day P&L and portfolio holdings. Integrated wireless solutions are set to cut the tether between the managers and their desktops, allowing access to all the necessary reports, market data and news to effectively manage their strategies, portfolios and trading activity from any location.
© 2006 Incisive Financial Publishing. Used by permission. Originally published in Hedge Fund & Investment Technology.
For more information visit:
Pyxis Mobile mHedge Manager™
BlackBerry Business Solutions for Financial Services
Customer Success Stories