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June 30, 1999

The Telephone Will Never Be the Same Again: Science Fiction Comes to the Turret

By Monica Simms

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As the line between telephone and computer technology continues to blur, the relatively simple-looking banks of telephones on a trading desk are being transformed in the process. These trading turrets, as they are called, are evolving into PC-like devices that seem more suitable on a sci-fi show like Star Trek than on a trading floor.

Are you a professional trader who uses a turret? Then hang on to your hat. The New Age turret may bring us where no man has gone before.

"More computer power combined with more exceptional speech recognition and heavy research into language translation will probably push [trading desks] more quickly toward a global trading market, operating 24-hours a day," said Robert McFarlane, president of Interport Financial, a division of Shen, Milsom & Wilke, a technology consulting firm based in New York.

The two largest U.S. turret suppliers, both based in New York, IPC Information Systems and BT North America, a subsidiary of the U.K.'s British Telecom, are releasing a battalion of tools that provide more capabilities than some veteran traders ever imagined possible.

Among the gizmos: voice-recording over a handset; a customer-profile capability triggered the instant a customer is reached via telephone; a system that allows floor traders to hear each others' voices as well as see each other on an intercom video; and a tool that simultaneously allows traders to view video clips, search text, and hold a voice conversation over the Internet.

Until recently, turrets were primarily used for making conventional telephone calls. But as the cost of manufacturing computer chips continues to decline, the processing power and speed that were once the exclusive domain of costlier PCs will be better utilized within the turret.

As a result, this transformation will allow a turret to handle video and market data, as well as voice over an Internet Protocol, or IP, and Internet-based information such as e-mail and web pages. Trading turrets, in fact, may evolve into peripheral network appliances that provide a stunning telephone-style user interface to the information highway.

"Today's turret is not particularly intelligent," admitted John Wayt, vice president of product development at IPC. "But with the ability to purchase increasing [processing] horsepower for the desktop at reasonable prices, the intelligence model is moving to the desktop."

"You'll see turrets and a host of market- data screens increasingly converging into a single desktop appliance that will be used for trading," he added. "That's already beginning to happen."

At a conference hosted last month by the Wall Street Telecommunications Association, an association based in Redbank, N.J. and supported by telecommunications executives at financial-services firms, McFarlane outlined a number of technology trends likely to impact how trading rooms communicate visually and orally.

Larger flat-panel display screens will be available in the coming months with ever-improved glare reduction and enhanced resolution. Speech-recognition systems are being tested to help bridge global barriers by translating foreign languages.

Speech recognition is still problematic at the trading desk, however, because of background noise levels. Developers are now exploring ways to combat ambient noise in the trading room, and are creating systems that are entirely speaker independent.