Underneath the Data: Industry Survey Reveals Familiar Fears, Trending Technologies & Opportunities for Growth

Post Eworld SocialThere is no place like E-world, one of Europe’s largest utility conferences, to walk the floor and find out what’s really shaping the market.  At this year’s E-world conference in Essen, Allegro shook hands with and surveyed over 130 major players who came to our booth to discuss what they see around the corner – good and bad. That said, we want to share what we discovered with you:

1. The biggest challenges facing trading & operations strategies
It’s no surprise that changing regulations continue to challenge trading and operations strategies, as well the ability to calculate risk around price volatility. These two concerns continue to spark discussion and remain of utmost importance in the building of strategies for energy trading organizations.

In almost equal percentages, regulatory compliance (34.6%) and price volatility (30.8%) emerged as the biggest headaches facing power and gas traders attending E-world, leaving several other areas of concern, including hedging, inventory strategy and logistical risk, to divide up the remaining third of responses.

Regulatory Changes and Price Volatility
It became evident as many visitors explained their frustrations over evolving regulatory environments that more extensible and flexible software solutions were needed to manage regulation standards. Many of the same businesses went on to explain how they have to put greater controls in place to ensure risk management thresholds are known and observed throughout the organization. Most companies surveyed explained that challenges arise when there are changes in risk profiles and information about these changes is delayed or inaccessible to managers. With disjointed data flows, their company’s exposure to risk increases, with some detailing catastrophic losses.

2. Big growth opportunities for business
Despite Blockchain being a big topic of conversation in all markets across the globe, 34% of survey respondents reported business process automation, while 33.3% claim algorithmic trading, as opportunities for business growth. This tells us that while energy professionals are interested in Blockchain (24.3% of survey respondents reported it as a business growth area), they realize that business process automation and algorithmic trading investments can make the greatest near term impact on their businesses.

Business Process Automation
Operational risk is prevalent in the energy market. Error prone manual exercises such as “fat fingering” trades or not having the correct documentation across front, middle, and back offices can greatly cost a business’ bottom line.

Our E-world booth visitors expressed a strong need to see how ETRM solutions allow for business process automation that provides full front to back automation, from entering trade and risk control and scheduling to back office accounting and settlement.  Our survey sparked deep discussions with most companies who scheduled live demonstrations in order to learn more about how they can become true “digital organizations.”

Algorithmic Trading
From conversations at our booth, it quickly became evident that energy trading professionals realize a great need for the ability to execute large trades using automated, pre-programmed trading instructions  that account for a multitude of variables, including time, price, and volume, to send small slices of orders out to the market over time. ETRM solutions, like Allegro’s Horizon, are built on continuous innovation made for the likes of algorithmic trading, making the possibilities endless; and giving companies a true competitive advantage.

Allegro gained great insight exhibiting at this year’s E-world exhibition – we learned much more than what the data revealed!

Thank you to those who participated in our survey and for those of you interested in learning more about how Allegro can help you with your energy trading and risk management challenges, click here to contact us today.

 

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