By Andrew Jappy, Executive General Manager – Asia Pacific (APAC), Iress
Australia’s trading environment is becoming more connected, more automated and increasingly international.
For brokers, wealth managers and other financial firms, the technology challenge is not simply what to modernise. It is how to connect markets, data and workflows more effectively, while retaining the flexibility to adapt as end client requirements and market opportunities change.
This matters because connectivity now extends well beyond the connection between a broker and anexchange. Trading depends increasingly on an ecosystem spanning client-facing applications, market data providers, counterparties, multiple execution venues, clearing and settlement infrastructure andcustodians. The more fragmented those connections become, the greater the integration burden each time a firm adds or adapts a market, service or capability.
Australia’s market infrastructure is undergoing significant changes. ASX SR16 will replace its existing trading engine, as well as a multi-year update to clearing and settlement systems. NSX is implementing a new trading platform based on Aquis Equinox technology. Cboe Australia acquired TMX Australia Exchange and is migrating systems and platforms to its AlphaX trading engine. These are distinct initiatives, but each illustrates the short term evolution of Australian trading infrastructure.
From more connections to better connectivity
Connecting to three new trading engines is only part of the story. The bigger question is how easily these can be developed, tested and integrated. Many firms are working with technology environments built over years, often around individual markets and asset classes, and specific client requirements.
Point-to-point connections may perform their intended function perfectly well, but complexity and operational risk grows as more connections are made.
A change to an interface, a new source of liquidity or an adapted market data feed can require work across several interconnected systems. This increases the value of modular architecture, open APIs and standardised connectivity.
While FIX has become fundamental to trading, the solutions around it are evolving, from individually engineered connections towards more centralised and flexible connectivity models that make it easier to onboard counterparties, introduce services and manage change consistently.
Cloud-based and modular platforms support the same objective, allowing individual components to beupgraded, integrated and scaled without wholesale change across the technology environment.
Few financial firms have the luxury of modernising trading infrastructure from a blank sheet of paper. Existing applications, market connections and workflows require substantial ongoing investment and must continue to support end clients as new capabilities are introduced.
If every external change triggers extensive internal development, delivery takes longer, implementation risks and costs rise, and business cases that might otherwise be attractive become harder to justify.
Global markets stretching the trading day
International market access adds another dimension. Australian investors can access markets and asset classes beyond domestic equities, requiring firms to connect trade execution, market data, FX, risk and post-trade processes across jurisdictions and time zones.
At the same time, many major international exchanges are extending the trading day. Nasdaq is scheduled tointroduce 23-hour weekday trading before the end of 2026, as are Cboe (US equities on EDGX) andNYSE Arca. In the UK, London Stock Exchange is developing LSE 24, a separate, near-continuoustrading venue, expected to launch in the first half of 2027 (subject to regulatory approval).
Firms offering international market access need the flexibility to respond as overseas markets evolve, but thatdoes not necessarily mean adopting every new capability. Each decision should be driven by end client demandand commercial opportunity – and must also consider whether existing infrastructure and operating models can support the change at an acceptable cost.
The overarching goal is building in the technological flexibility to evolve with market and end client requirements, while preserving economic choice over which opportunities to pursue, and when.
Connected markets need connected data
Market connectivity has limited value if firms cannot make effective commercial use of the information moving across those connections. Whether accessing domestic or international markets, firms must be able to capture and manage market and trading data efficiently from multiple venues, counterparties, trading systems and client-facing applications.
Good data management brings together real-time pricing and market depth with other decision-influencing information, including news, fundamentals, corporate actions and analytics, and normalises it for consistent use across trading and operational workflows. Adding more data does not automatically create better information. Firms need reliable, trusted data, accessible across systems and processes, to support all required functions and workflows.
AI starts with data readiness
AI incorporation takes that requirement further. Its practical applications in trading can range from complex analytics and market-data enquiry to liquidity and transaction-cost analysis, portfolio intelligence, workflow automation and operational monitoring.
The starting point is not where AI can be integrated into a workflow. It is whether underlying data issufficiently accurate, accessible and well governed, the process itself is suitable for automation, and the resulting AI enablement meets a genuine client, business or commercial need.
To that end, AI readiness and connectivity readiness go hand in hand. Both depend on the ability to bring information together across systems, rather than supporting isolated applications and data sets.
Building resilience into a more connected market
Ultimately, a technology failure will likely become a service failure. Every additional connection, application, automated process and third-party service potentially creates a new infrastructure dependency. Increasingly, these dependencies span domestic and international operations, and longer offshore trading periods reduce traditional maintenance and support windows.
Resilience has to be designed into modernisation strategies.
Firms need visibility across dependencies, effective monitoring and recovery processes, appropriate risk controls and the ability to accommodate exchange and regulatory changes, without destabilisingestablished services.
As markets become more automated, and operate for longer, resilience also has to extend right across the broader operating model rather than being treated purely as a local technology issue.
Modernisation should create business choice
Market infrastructure and trading technology is advancing at different speeds. Being prepared for a moreconnected market means managing the gaps between those changes. Australian firms will modernise atdifferent paces, because their clients, business models and existing technology commitments are varied: a retail broker providing international equity access will make different choices to a wealth manager or institutional participant.
The business case for modernisation is not technology for its own sake. It is creating the ability to connect a new or changed market, or counterparty, more quickly, introduce products and services without disproportionate redevelopment, automate manual processes and make better use of data, and reduce the cost and operational burden of change.
What does readiness for a more connected market mean?:
- Responding to infrastructure change without disrupting existing systems and services.
- Extending international and multi-asset market access as client demand and the business case justify it, including the ability to support 23/5 and other extended-hours trading as required.
- Introducing new applications and connections through flexible APIs and standardised connectivity, without breaking established workflows.
- Bringing data together across systems, breaking down silos and supporting moreautomated, data-driven and AI-enabled
- Strengthening resilience and data governance as connectivity, automation and third-party dependencies proliferate.
- Measuring the impact of modernisation through practical measurement like time-to-connect,uptime, levels of automation and cost-to-serve.
Australian market participants cannot control the pace at which exchanges, end client expectations andtechnologies evolve. What they can control is whether their operating infrastructure gives the business thefreedom to respond effectively.
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