Tanishka Dubey

November 11, Chennai,

Wealth management are adding software engineers to the trading teams, replacing traditional traders with algorithm experts.

Demand for traders fell by more than a half in wealth management firms after the adoption of algorithms for trading.

“We used to have a team of 50-60 traders which has reduced to 15 traders now,” said Rachit Mehta, chief product officer, India Infoline Finance Limited (IIFL).

Automated or algorithmic trading helps firms execute a trade faster with the use of computer programs. About 60-65% of trades in India are made using algorithms, said a Deloitte December 2023 report.

The adoption of algorithms is led by a jump in the number of trades per day “The number of trades has increased from 1-2 trades per week to 100 trades per day,” said Adarsh Motwani, vice president, True Beacon. “This rise in trade volumes requires execution at high speed which is beyond human capability”.

The move from traditional trading to algorithmic trading requires traders to upgrade their skills to stay employable in current market conditions. Brokerages prefer quant traders, who have trading acumen and coding expertise, over those who do not possess these skills.

“After I joined a brokerage firm. I was surprised by how much machine learning was used in daily trades. While we were given a week to learn the basics, it wasn’t clear how essential algorithmic and AI/ML skills would be,” said a Deloitte auditor on the condition of anonymity.

The use of technology in trading has also created more opportunities for software engineers.“In the last 1-2 years we have increased the number of engineers as they help build algorithms that make trading
efficient and faster,” said Ramdeo Agarwal, chairman, Motilal Oswal Financial Services
Ltd.

Other brokerage firms like IIFL, which had 20 engineers on their teams in 2020, have also increased hiring fivefold. Skills for machine learning models and interpretation of data for insights have become
valuable.

Algorithmic trading is expected to grow at a compound annual growth rate of 11.23%
between 2021–2026, said the Deloitte report.

The team restructuring effort is noticed across industries like healthcare, manufacturing, and retail, where technological expertise is reshaping how companies compete and create value for customers and become more efficient.