Capital Markets Connectivity: Solving Fragmentation

I recently had the opportunity to participate on a panel at the Plato MI3 Conference to discuss the output from Rebecca Healey’s new research paper highlighting the cost and complexity of end-to-end trading connectivity (“Connectivity in the Age of AI”).

As the report points out, capital markets firms are under mounting pressure. While electronic trading has evolved rapidly, the infrastructure that underpins these innovations has not always kept pace. This has resulted in soaring costs, spiraling complexity, and a tangled web of legacy systems that make modernisation feel more like surgery than strategy. Throw in competitive pressures, growing regulatory oversight, and shrinking margins, and there is deep concern that this is unsustainable for many firms.

Commissioned by Plato Partnership, Rebecca’s research shows that over 90% of the market participants interviewed describe the current ecosystem as highly fragmented. This has consequences – “Compliance is becoming a bigger issue as data fragmentation persists. Firms have spent years layering system upon system, leaving them with fragmented data across front, middle, and back office,” according to the Head of Trading at a large global asset manager.

Innovation and competition have fueled the development of capital markets and sophistication of modern market structure. Transformation of the liquidity landscape, the number and variety of financial instruments, and trading electronification have created investment opportunities but at the cost of exponential growth in data and operational complexity. This challenge is exacerbated by a reliance on legacy technology and reactive regulation driving ever more stringent risk and reporting requirements.

The challenge isn’t just financial. Siloed technology stacks and entrenched legacy platforms prevent data from flowing freely across trading, compliance, and risk functions. Interoperability is further hampered by inconsistent implementation of industry protocols where variations in usage create a pseudo-standard environment that’s costly to maintain and difficult to scale. As the Head of Dealing at a large UK Asset Manager points out: “Silos are still everywhere, and they slow everything down. Information gets stuck, reporting is duplicated, and compliance teams don’t always see what’s actually happening on the desk”.

This fragmentation creates genuine risk. Disconnected systems complicate regulatory compliance, hinder AI implementation, and limit firms’ ability to optimise execution and access real-time insights. “The bigger and more diversified you get, the harder it is to make everything talk to each other. It’s not just integrating data but making information usable across functions without manual intervention – all our systems need to be 100% interoperable” according to a senior executive at a leading global buy-side firm. And while some firms aspire to “rip and replace” their legacy platforms, few can afford the operational risk or financial burden that approach entails.

While these challenges have intensified over recent years, they have been apparent for some time. Addressing them has been at the heart of Rapid Addition’s strategy to help our customers deconstruct monolithic, commercially opaque trading systems, and replace them with interoperable, agile, vendor neutral trading infrastructure designed around each firm’s specific business model.

Breaking Down Silos

Rapid Addition’s enterprise technology acts as a vendor-neutral integration layer that brings together data from multiple systems—whether legacy or modern—into a unified framework. By enabling centralised access to trade, risk, and compliance data, it helps firms create a single source of truth, reducing duplication, streamlining workflows, and unlocking value.

Addressing Protocol Inconsistencies

Protocols such as FIX are foundational to electronic trading, but inconsistent implementation across firms leads to high integration costs and reliability issues. RA Platform can natively support any trading protocol, including custom variants. Powerful session management and message transformation tools simplify data normalization, reduce errors, and enable seamless integration with other systems.

Modernising Without the Risk

One of the biggest barriers to change is the risk of replacing legacy systems. RA Platform’s modular architecture allows capital markets firms to modernise incrementally. Supporting multiple protocols and APIs, it enables firms to replace or enhance specific components—such as order routing or real-time quote distribution—without disrupting the entire stack.

The CTO at a major global bank endorses this pragmatic approach, suggesting “The challenge is finding the right balance between security, compliance, and efficiency without disrupting existing workflows. Start small. Build modular components around legacy cores. Don’t try to rip out the heart of the system unless you’ve got five years and a bottomless budget”.

Future-Proofing Connectivity

As the Plato report concludes, achieving true interoperability and cost transparency demands architectural agility. Rapid Addition can help capital markets firms evolve on their terms, reduce hidden costs, and lay the groundwork for next-gen trading strategies powered by AI and clean, connected data.

In a world where complexity is rising and every basis point counts it’s time to stop tolerating fragmented, siloed infrastructure—and start transforming it.

You can read the full report here.