The beauty of open-source technology is simple: it gives everyone access to the same standard of tools that the most sophisticated market participants are using and it so in a radically transparent way.
Whenever people across firms write code and build systems that are fundamentally similar, that technology should be open source. In-house developers should have the freedom to focus on those pieces of proprietary technology that do deliver a competitive advantage especially considering how new regulations are changing the way financial firms deal with risk. It’s requiring that significant investment go into upgrading risk infrastructures to handle new regulations meaning that developers need much more generic architectures that are capable of making changes on the fly.
I’ve heard arguments that trading and risk analytics are the secret sauce for many firms but in the end, the competitive advantage gained from these functionalities comes down to a few key factors – the trader himself, the choice of metrics to view a portfolio, the points to include in a yield curve. These are all human factors that are in no way reliant on a platform’s source code.
Open source trading and risk solutions actually enable this. They remove need to devote brainpower to core technological functions, allowing firms to focus their efforts in more profitable areas and reap the benefits faster than if they have to build those technologies from scratch.