Citigroup has claimed that its new wireless-based trading system is helping to cut costs and is proving a hit among brokers.
The company, like others, had to dispense with the traditional paper-based system to comply with New York Stock Exchange requirements. Member companies could make the transition either by choosing a third-party application or by building their own.
Citigroup opted to build its own system in an attempt to give its traders a proprietary advantage. It developed and deployed a wireless handheld system for its 24 brokers on the NYSE floor. The new system not only eliminates manual trading and reporting processes, but also assists brokers in making trading decisions on the fly via a sophisticated set of easy-to-use applications linked to a remote "strategy server".
"We pretty much went against the grain of what others were building," said David Matthews, the project's co-leader, noting that while many companies went with small PDAs, Citigroup chose to deploy a "half-tablet PC" with an 8.5-inch screen. It runs a set of applications with specialised toolbars and graphical devices to enable powerful trading functions with just a few screen taps.
The team also designed sophisticated algorithms to help brokers make key trading decisions instantly, such as allocating block trades among customer orders.
"The allocation algorithm is its real tour de force," explains Howard Heisler, the project's technical lead. "We wanted to free up the brokers to do as much trading as possible. ... Now the broker has the ability to strategise it once and the system will take over."
Another challenge was optimising data for transmission over the NYSE's low-bandwidth wireless network, which Citigroup shares with 1,500 other devices on the exchange floor.
The Citigroup handheld platform is a touchscreen Fujitsu Stylistic LT C-600 running Java applications and talking to a Sybase data server on the back end via an XML messaging standard.
Citigroup said the system has helped halve operational costs, and trading discrepancies dropped from 350 to less than 35 a day. The head count of data-entry clerks and assistants dropped from 54 to 24, and stationery costs have dropped 75%.
There are also competitive benefits. "It allows me to cover numerous situations at one time and get the information to my customer faster than I had in the past," says Jacqueline Moran, one of the floor brokers using the new system.
David L Margulius writes for infoWorld