Citigroup’s challenge was a tall order: revolutionize its paper-based system for recording trades and market conditions, known on the floor of the New York Stock Exchange as the “open outcry” trading system.
To comply with NYSE requirements that all member companies move to paperless trading systems either by choosing a third-party application or by building their own, Citigroup opted for the latter in an attempt to give its traders a proprietary advantage. Citigroup developed and deployed a wireless handheld system for its 24 brokers on the NYSE floor. The new system not only eliminates manual trading and reporting processes, but also assists brokers in making trading decisions on the fly via a sophisticated set of easy-to-use applications linked to a remote “strategy server.”
“We pretty much went against the grain of what others [were] building,” explains David Matthews, the project’s co-leader, noting that while many companies went with small PDAs, Citigroup chose to deploy a “half-tablet PC” with a large 8.5-inch screen. It runs a set of applications with specialized toolbars and graphical devices to enable powerful trading functions with just a few screen taps.
The team also designed sophisticated algorithms to help brokers make key trading decisions instantly, such as allocating block trades among customer orders. “The allocation algorithm is its real tour de force,” explains Howard Heisler, the project’s technical lead. “We wanted to free up the brokers to do as much trading as possible. ... [Now] the broker has the ability to strategize it once and the system will take over.”
Another challenge was optimizing data for transmission over the NYSE’s low-bandwidth wireless network, which Citigroup shares with 1,500 other devices on the exchange floor. The Citigroup handheld platform is a touchscreen Fujitsu Stylistic LT C-600 running Java applications and talking to a Sybase data server on the back end via an XML messaging standard.
Citigroup says the system has helped reduce operational costs 50 percent. Trading discrepancies dropped from 350 to less than 35 per day. The head count of data-entry clerks and assistants dropped from 54 to 24, and stationary costs have dropped 75 percent.
There are competitive benefits as well. “It allows me to cover numerous situations at one time and get the information to my customer faster than I had in the past,” says Jacqueline Moran, one of the floor brokers using the new system.