How Sell-Side Firms Can Thrive by Putting Advanced Technology in Users' Hands
As technology becomes more accessible, sell-side firms must put powerful tools directly in users' hands to stay competitive. Self-service tools and intuitive platforms are leveling the playing field, enabling smarter decisions and greater efficiency for both internal and external users. Firms prepared to foster a tech-savvy culture will stand out in the data-driven financial landscape.
Technological innovation has long been a defining feature of the financial services industry. And the speed at which innovation is growing has been spellbinding. Statista reported the total amount of data created, captured, copied, and consumed globally reached 149 zettabytes in 2024.1 AI advancements continue at a breakneck pace, prompting many to wonder when people, and not just organizations, will get a personalized co-pilot.
As technology becomes more ubiquitous, if not intimidating at times, the knowledge curve traditionally associated with modern tools is actually beginning to flatten. This shift presents a unique challenge and an opportunity for sell-side firms.
Firms that will thrive in this environment are those that focus on empowering their users with advanced technology. By providing intuitive tools, easy access to sophisticated data, and the right infrastructure, firms can create a competitive edge in a landscape where technology is becoming increasingly democratized.
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What does flattening the technology curve mean?
Historically, development and deployment of cutting-edge financial technology required specialized expertise. IT teams maintained and managed on-prem hardware and software, with a heavy emphasis on troubleshooting and reactive problem-solving. Tools such as advanced data analytics platforms were confined to a small group of professionals with the skillset and access to the right systems.
Today, the knowledge curve is flattening as technological barriers fall away. The rise of cloud computing, AI, machine learning, and open-source software is driving down the cost of development and implementation. User-friendly platforms and solutions, once only available to a select few, are now increasingly accessible to the broader market.
Impressive technological advancements have created a flatter technology curve. But we can’t overlook the impact of the cultural shift and expectations for easier-to-use tools. In the past, firms viewed technology as specialized tools almost exclusively designed for technologists and engineers. Low- and no-code platforms, AI-powered assistants, and highly intuitive analytics tools have changed the game.
Putting technology in users’ hands
As the technology knowledge curve flattens, sell-side firms that succeed will be those that put powerful tools directly into the hands of their users — both clients and employees — enabling them to access the information, make decisions, and drive efficiency without needing specialized expertise. This user-centric approach is transforming how sell-side firms engage with their clients and how they operate internally.
RELATED READING: Empowering Sell-Side Talent & Enhancing Collaboration with Self-Service Technology
Empowering external users
The buy-side landscape continually evolves. The modern investor is no longer solely reliant on traditional research reports and trading desks for information. The pursuit of alpha is omni present — so is the focus on cost and risk optimization. As buy-side firms operate amidst a complex web of tools, applications, and data sources, sell-side firms have an opportunity to help their clients streamline and enhance workflows to reduce manual processes, minimize errors, and accelerate trading and investment decisions. And if firms can give their clients a way to optimize costs, while enabling faster time to market, sell-side firms stand to gain a serious competitive advantage.
Intuitive platforms that enable clients to access complex datasets, perform sophisticated analyses, and execute trades seamlessly enable firms to differentiate themselves in a crowded market.
Let’s look at algorithmic trading as an example. In the past, algorithmic trading was something only accessible to large institutions with extensive quantitative research teams. Today, cloud-based platforms are providing off-the-shelf solutions that allow even small firms to implement sophisticated strategies. The result is a more level playing field, where the value lies in the ability to quickly adapt to market conditions and the quality of insights rather than access to specialized technology.
Empowering internal users
The impact of the flattening tech knowledge curve is also evident within sell-side firms themselves. Technology has become a differentiator, but it is no longer necessary for every employee, particularly senior leaders, to have deep technical expertise. Rather, a general understanding of the tools, systems, and data flows involved in operations and client support has become a necessity.
The challenge lies in ensuring that employees at all levels, from the junior staff to the executive suite, have access to intuitive tools that empower them to make data-driven decisions without needing to be experts in complex systems.
As advanced technologies become more accessible, firms can implement sophisticated tools to streamline operations and reduce costs. Automation is a key driver of operational efficiency, and by adopting AI and machine learning solutions, firms can automate time-consuming tasks such as trade reconciliation, compliance checks, and risk management.
The introduction of AI-powered systems to handle mundane tasks allows employees to focus on higher-value activities, such as delivering personalized services to clients. Operational agility is critical in a world where margins are tightening, and the demand for high-quality, personalized service is higher than ever.
Moreover, cloud computing and software-as-a-service (SaaS) platforms have provided sell-side firms with scalable solutions that can grow alongside their needs. No longer do firms have to invest heavily in on-premise infrastructure or spend significant time training employees on complex systems. With intuitive, user-friendly platforms, firms can deploy solutions across their organization and scale them efficiently as their business grows.
Historically, firms relied on a centralized architecture to store data in a single, unified repository. This approach created consistency, but it also surfaced bottlenecks and scalability issue, especially in complex organizations.
For many firms, one size does not fit all. What worked for an asset manager probably won’t work at a bank.
Data mesh architecture can act as a critical way to drive a data-driven culture by enabling firms to replace underlying architecture without disrupting upstream systems.
A data mesh is a type of platform architecture that organizes data by business domain, enabling each team to create data products for use by downstream systems. Teams ingressing the raw data establish governance parameters for documentation, quality, and access — while teams across an organization can still acquire data products for their own use case. With a data mesh in place, institutions are able to give ownership to departmental teams while they transform colossal volumes of raw data into an actionable asset that can drive higher-level decision-making and ultimately ROI.
Fostering a culture of innovation
The flattening tech knowledge curve presents an opportunity for sell-side firms to foster a culture of innovation. By empowering employees at all levels to experiment with new technologies and find creative ways to leverage them, firms can cultivate an environment where technological innovation becomes an inherent part of operations.
This cultural shift requires a rethinking of how technology is integrated into operations. Rather than relying solely on a centralized team of IT specialists, firms must encourage cross-functional collaboration, where employees from different departments — whether it’s trading, research, or client service — work together to identify opportunities for advancement.
Leading companies are already embracing this approach with internal incubators and innovation labs to bring together experts from various disciplines to develop new technology solutions.
Thriving in the new knowledge curve
With the sheer volume of data now available, the key to success lies not just in collecting information, but in making sense of it. The ability to use technology to analyze data quickly and effectively will be a defining characteristic of successful sell-side firms.
As technology advances at lightning speed, sell-side firms face a challenge: how to differentiate themselves in a world where access to powerful tools is becoming more widespread. Firms that will thrive in this environment are those that focus on enabling their users to make the most of these technologies.
By providing user-friendly platforms that make advanced analytics, automation, and machine learning accessible, sell-side firms can create significant value for their clients and enhance their own internal efficiency. A culture of innovation and experimentation will help these firms stay ahead of the curve, constantly pushing the boundaries of what’s possible.
Sources:
1. Amount of data created, consumed, and stored 2010-2023, with forecasts to 2028, Statista, November 21, 2024.
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