Banks Embrace Open Source Technology

In another sign that the workload of trading floor IT workers is shrinking in the face of smaller technology budgets, banks are increasingly considering the use of open source technology in the front office.

At the moment, this seems to be restricted to a single offering in the form of Marketcetera - an automated trading system based around Java technology. The developers claim it is the first of its kind.

Wall Street & Technology quotes Marketcetera founder Graham Miller, who says the crisis has shattered the orthodoxy around the correct way to build bank systems and allowed for more "creative" thinking about software works.

It also helps that open source products are cheaper.

Kevin McPartland, senior analyst at Tabb Group, says: "More vendors are offering open source products and this will continue to evolve."

The use of open source technology within financial services is not entirely unheard of - skills around back office open source software like Linux are now valued, for example - the front office systems are still a relatively nascent phenomenon.

Marketcetera itself, however, has been building its team this year through a series of senior appointments.

Banks are also dipping their toes in open source technology elsewhere. WST says Morgan Stanley, JPMorgan and RBC Capital markets use Eclipse, an integrated development environment (IDE) for Java, to develop fixed income trading systems. And Bank of America, as well as some hedge funds, use R - an open source data analytics software program.