Liquidity tested: How tech enables sell-side resilience

Bloomberg

11-07-2025

Confidence through communication
During Bloomberg's Sell-Side Leaders Forum in London, in May 2025, participants reflected on recent volatility and how banks can better prepare for future disruptions.
Keeping customers abreast of market conditions in real time emerged as one of the most effective strategies. Thanks to AI-enhanced messaging and chat systems, such as Instant Bloomberg (IB) and other data-led solutions, traders were able to keep information flowing as markets moved. This enabled counterparties to quickly gain insights into their markets, assess liquidity and make decisions swiftly.
Customers were able to learn as quickly as banks about market developments, empowered by tools that allowed them to understand the liquidity situation in near real time. By running analytics across flows, risk, cross-market information, volatility, trading volumes and other critical metrics, banks kept both human and algorithmic trading partners fully informed.
A guiding principle emerged: make it easy for people to make good decisions.
Enhanced stability with cross-platform data
Open channels are more effective if they're powered by high-quality data – and this is where electronification has proven invaluable for the sell side. Beyond streamlining trade order, execution and settlement, electronic trading has enabled the capture of critical data on trade costs, performance and price shifts. This has led to more accurate pricing models and stronger risk management frameworks.
Recognizing these benefits, banks have invested heavily in digital systems over the past decade. Data-led processes have also made it possible to integrate trading desks across multi-asset strategies, providing a fuller view of markets at any given time. That was especially important in helping traders identify available liquidity during recent market stress.
Integration across portfolio businesses, ETFs, traditional desks and algorithmic strategies—combined with unified tech and pricing stacks and comprehensive risk views—has proven crucial. Understanding exposure across different layers of liquidity is a key aspect of this approach.
Continued electronification
So far, the electronification of trading has progressed at varying speeds across asset classes. Equities and foreign exchange have led the way as they rely heavily on structured data that digital systems can more easily process.
For other assets that require more nuanced and subjective unstructured data, including fixed-income and derivatives, digitalization has been slower. This is changing.
In terms of electronification, fixed income is beginning to catch up with its peers. Smaller and batch trades are now being largely executed by auto-trade tools aided by pricing services, including BVAL, Bloomberg's evaluated pricing service, and B-PIPE, a real-time market data feed that enables firms to power trading, analytics, and risk systems with high-quality, per-security streaming data.
But even traditional voice trading can benefit from real-time data solutions. During the period of tightening liquidity in fixed-income markets observed in the early months of 2025, traders were able to make quicker, more effective decisions because they were informed by pricing and research backed by real-time data, derived, in part, by AI tools such as natural language processing and machine learning tools. These technologies can scan and tabulate disparate data points from a variety of information sources that regular systems can't process – sources such as PDFs, media reports and even social media.
A tailored future
As electronification accelerates, more sell-side processes are likely to be outsourced to specialist technology suppliers. The providers best positioned for success will be those that offer a tailored service recognizing not only the unique characteristics of each client but also the requirements of the different assets and markets in which they trade.
The pace of electronification varies not only by asset class but also within organizations and departments. To be effective, third-party providers must understand these dynamics and offer solutions that integrate seamlessly across diverse systems.
Partnership, mutual understanding and transparent communication about methods and processes are essential. Providers who can explicitly align with the operational style and objectives of their clients will be best positioned to support the sell side in an increasingly digital future.
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