This century a paradox has haunted traders on Wall Street and in the City. On the one hand, markets have moved to electronic platforms and can theoretically be traded anywhere. But financial institutions have also spent lavishly on flashy trading rooms, assuming that humans must sit together to stare at that technology.
Might the experience of Covid-19 help resolve this paradox? Over the past six months, lockdowns have done what digital innovation alone could not: forced financiers to rely on cyber links. Many trading floors have operated with skeleton staff. Even venues that have “reopened”, such as the New York Stock Exchange in late May, have cut the human presence dramatically.
Top executives are now reviewing this experience. And, behind the scenes, they are drawing several lessons that investors need to watch — not least as they could subtly reshape the future contours of finance.