A new research note from TowerGroup says that the trading floors of the future will feature greater automation and better space saving, but implementation of wireless technologies will proceed cautiously.

In the report, “Trading Floor Infrastructure: Choosing the Best Options”, TowerGroup analyst Andy Nybo says that, “Trading floors of the future will leverage technology to maximize efficiency of space utilization and provide traders and sales personnel with the most up-to-date and efficient tools to complete their responsibilities. They will also incorporate technologies that make operations more efficient through reduced operational and maintenance costs.”

Nybo cites the move to flat panel displays as an example of the emphasis on space-saving. At the same time, firms are moving to centralize data storage and processing equipment into dedicated computer rooms to maximize the use of space on trading floors. Trading floor infrastructure design will also need to incorporate the move to the T+1 settlement cycle and straight through processing capabilities. “Firms that fail to implement end-to-end automated processing solutions will see costs rise and profitability decline correspondingly.”

One technology that will be slow to emerge is wireless devices, TowerGroup says, until concerns about security and reliability are assuaged.

While PDAs, cell phones and pagers will be ubiquitous, “There will continue to be substantial resistance to a total wireless network solution, however, as management will be slow to adapt wireless connectivity until bulletproof solutions are developed that effectively negate any security or reliability concerns.”