Disruptive Technologies in Commodity Trading Markets

Disruptive Technologies in Commodity Trading Markets

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Over the last few years, a host of potentially disruptive technologies have emerged that may yet have tremendous impacts on aspects of commodity trading and commodity supply chain business processes. These technologies join the shift to cloud deployment and software-as-a-service (SaaS) that we have observed taking on greater importance in the delivery of CTRM solutions recently. Technologies such as blockchain, automation, Artificial Intelligence (AI) and Machine Learning (ML), big data and social media, micro-services and open source software have all caught the imagination of software providers and industry players over this period. In particular, there has been a great deal of interest and considerable hype around blockchain and distributed ledger technology, while AI and ML are also seeing deployments in automated trading and elsewhere.

In addition to providing an overview of the changes occurring across the technology landscape, this Commodity Technology Advisory Disruptive Technology Study was devised and executed to establish how the wholesale commodities industry views these technologies, where and how they are being deployed, and to try to ascertain the level of threat these new technologies may pose to existing solutions and applications areas like CTRM software. ComTech conducted the survey component of the study using a web-based tool between December 2017 and early June 2018. Survey responses were encouraged through email, blog and word of mouth efforts including an email from the sponsor – FIS. The disruptive technologies survey had 82 valid participants with just over half of those being located in Europe.

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Latest Publications

CTRM Vendor Perceptions 2018

CTRM Vendor Perceptions 2018

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The 2018 Commodity Technology Advisory’s vendor perception study was conducted to establish end-user and market influencer perceptions of the CTRM vendors to determine market leadership perceptions as well as buying criteria, demand levels, and brand awareness of the different vendors. The research comprised of a comprehensive set of questions that end users and others (including industry consultants but excluding vendor personnel) were invited to answer as an internet survey. The survey was open for responses between May 21st and September 30th, 2018 and collected some 195 responses.

The survey was promoted in several ways to attract bone fide respondents. ComTech Advisory used email notification, Linkedin posts, blog articles, banner advertising and verbal requests to encourage responses. CTRM vendors and service providers also promoted the survey of their own accord. Unfortunately, the EU’s new GDPR legislation had a significant impact on our ability to use email to request responses and also forced us to add a privacy notice to the survey essentially meaning that to respond, respondents had to opt in to take the survey. Some 10% opted out with a further unknown number who did not take the survey due to the privacy notice. Consequently, the number of responses is slightly down on 2016 (230 responses) and a number of responses were left blank by respondents after reading the privacy notice.

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CTRM Briefing Note - Allegro Development

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Allegro Development (Allegro) is the oldest continuously operating ETRM/CTRM solutions provider in the world. Founded in 1984 by now chairman Eldon Klaassen, the company initially serviced the oil & gas producer market’s needs for a dedicated solution for tracking and managing commodity sales in the still highly regulated US energy markets. With deregulation of the US natural gas markets in the early 1990’s, the market for the company’s products grew rapidly. Despite a number of new solutions providers entering the market during that period, Allegro has consistently seen demand grow for its products across all energy commodities and markets, including expansion into the European and Asia Pacific regions. Currently the company maintains sales and support offices in 7 countries.

Operating from their Dallas headquarters since the company’s founding, Allegro has grown primarily through organic growth, supplemented by two acquisitions: JustCommodity, a Singapore-based provider of CTRM for the global softs markets in 2015, and FEA, a US-based provider of risk analytics in 2018.

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Commodity Trading and Risk Management in a Multi-asset Class Portfolio

Commodity Trading and Risk Management in a Multi-asset Class Portfolio

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After a period that saw commodity prices and volatilities broadly collapse, there is every indication that commodities are once again an attractive asset class. Prices and volatilities have been rising again across almost all commodities, and investors have been returning in droves. This was demonstrated by the S&P GSCI, having reached a low point in 2016, before climbing relatively steadily ever since. Meanwhile, low interest rates, solid economic growth across the globe and rising corporate earnings have hoisted equities to record levels early in 2018, before losing some luster recently. Commodities, the basic building blocks of civilized life, are again in demand – both from consumers as well as investors.

The rise in commodity prices and volatilities impacts everyone as this comes at a time when there is increased regulatory and stakeholder oversight, geopolitical uncertainty, and fundamental shifts in technology and industry structure are taking place. All aspects of risk are important, but operational risks and cross asset risks/opportunities in particular, have increased in importance. Many companies are also seeking to reduce costs and engage in digitalization programs while seeking system consolidation and a reduction in total cost of ownership of solutions.

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Disruptive Technologies in Commodity Trading Markets

Login to the CTRM Center to Download

Download on the CTRMCenter.com

Over the last few years, a host of potentially disruptive technologies have emerged that may yet have tremendous impacts on aspects of commodity trading and commodity supply chain business processes. These technologies join the shift to cloud deployment and software-as-a-service (SaaS) that we have observed taking on greater importance in the delivery of CTRM solutions recently. Technologies such as blockchain, automation, Artificial Intelligence (AI) and Machine Learning (ML), big data and social media, micro-services and open source software have all caught the imagination of software providers and industry players over this period. In particular, there has been a great deal of interest and considerable hype around blockchain and distributed ledger technology, while AI and ML are also seeing deployments in automated trading and elsewhere.

In addition to providing an overview of the changes occurring across the technology landscape, this Commodity Technology Advisory Disruptive Technology Study was devised and executed to establish how the wholesale commodities industry views these technologies, where and how they are being deployed, and to try to ascertain the level of threat these new technologies may pose to existing solutions and applications areas like CTRM software. ComTech conducted the survey component of the study using a web-based tool between December 2017 and early June 2018. Survey responses were encouraged through email, blog and word of mouth efforts including an email from the sponsor – FIS. The disruptive technologies survey had 82 valid participants with just over half of those being located in Europe.

Visit the ctrmcenter.com to download