Buy-side desks are grappling with siloed liquidity, underperforming systems and the unfinished promise of electronification as markets transform.
The fixed income trading desk of 2026 is better equipped than at any point in the market’s history. Data volumes have risen sharply, electronification has extended into new corners of the market, and a wave of technology investment has reshaped how orders are generated, routed and executed. Yet conversations with senior traders at some of the world’s largest asset managers reveal a profession still wrestling with deep structural problems; fragmentation, system underperformance, and a growing mismatch between the technology on offer and the needs of the people who use it.
The most consistently cited challenge across buy-side desks ahead of the FILS 2026 event in Boston is the fragmentation of liquidity. Credit markets remain organised around a series of largely siloed ecosystems. Individual trading venues, dealer platforms and protocols each hold pools of liquidity that can be difficult to aggregate but are equally hard to provide commercially without platform providers and dealers having control over them. from the with the trade-off between consolidation and breadth of access is one that desks across the industry are still working through, with no clean solution in sight.
OMS / EMS challenges
If fragmentation is the structural backdrop, the limits of order management systems to keep pace with trading desk needs is the operational manifestation. Multiple senior traders pointed to a significant and growing gap between what large OMS providers have promised on the execution side and what they have delivered.
“Getting an OMS to talk to EMS vendors has not been an easy task,” notes one, “Functionality should be far more prevalent in OMS systems to start with.”
Execution management systems have emerged in part to fill this gap, but their adoption is encountering its own headwinds. Costs are high, venue coverage is incomplete, and the value proposition of aggregation, the central selling point of an EMS, is diminished when not every protocol or trading venue can be accessed through it. Venues are launching EMS-style interfaces to capture that activity.
OMS migrations themselves are resource-intensive and expensive, absorbing technology budgets that might otherwise fund other improvements.
“In the midst of an OMS migration,” one trader opined. “Going down to the corner office and asking for additional spend is not a conversation anyone wants to have.”
Data: more of it, less useful than it should be
The volume and quality of fixed income market data has improved significantly over the past decade. Pre-trade pricing, dealer axes, real-time inventory and post-trade analytics are all more accessible than they were. This has fuelled the use of EMSs. Yet traders report that having more data has not automatically translated into better decision-making, where the data remains difficult to consolidate and act upon in real time, often requiring proprietary analytics to make it work.
Bringing higher conviction information into the order generation process earlier would potentially allow portfolio manager to produce orders with a higher probability of execution.
In European markets, the absence of a consolidated tape has compounded this challenge. While the arrival of a unified post-trade data source in Europe is expected to be transformational, rather than incremental, this will be likely to democratise access to trade data and reduce the cost of demonstrating best execution for smaller and mid-sized market participants, rather than having an equal effect on all.
A better market
Bond market issuance volumes are at or near record levels. Demand from a broadening global investor base is absorbing supply. Liquidity in most market conditions has proved more resilient than feared. These structural strengths coexist with a technology infrastructure that is still in transition from analogue to digital, fragmented to consolidated, and from manual to automated.
For the traders sitting between these worlds, the day-to-day reality is one of managing the gap: between the systems they have and the ones they need, between the data that exists and the data they can actually use, and between the promise of new technology and its delivery on the trading floor.
©Markets Media Europe 2025
