Bear Stearns Sets Up Voice System for Traders

Seeking to succeed where other investment firms have failed, Bear, Stearns & Co. has rolled out a voice recognition system for its equities trading operation.

Ten Bear Stearns traders are now working live with the system, using voice recognition technology from Ficomp Systems Inc.

The system, called Interpreter 6000, allows traders at the New York- based investment bank to bark their deals directly into their computers for execution and settlement, bypassing keyboard entry.

Bear Stearns officials said they are among the first investment banks to install a voice recognition system for trading, a technology which until now has met with little success on Wall Street.

Voice recognition systems have been generally seen as balky, especially in the hectic trading room environment where background noise and changes in traders' voice pitch make it more difficult for the computers to understand spoken words.

"We have seen voice recognition systems come and go on the Street, but we believe the Interpreter 6000 has a chance for long-term success," said William J. Marshall, senior managing director at Bear Stearns. He added that his firm is engaged in a phased rollout of the system, which eventually could be used by most of the firm's 500 equities traders, as well as by the firm's correspondent trading and clearing clients.

"Other voice recognition systems have been tested, but until now no large-scale acceptance has occurred in the financial industry because the technology was viewed by traders as immature," said Gary Richman, president of Ficomp, a Dayton, N.J.-based systems integrator. "However this perception is changing as performance and recognition are achieved that meet traders' approval and allow for increased accuracy and productivity."

Using speech recognition is just the latest attempt to automate trading desks in order to make the business more efficient. Despite the installation by securities firms over the past five years of powerful computers that track minute financial movements worldwide, many traders still write out trade tickets that are then routed to the back office for settlement. Voice recognition can significantly reduce the number of data entry errors that occur as trades move from the front to the back office, Mr. Richman said.

Traders are also impressed with how quickly the system responds to their spoken commands, often in less than a second, he added.

"Getting the system to recognize your voice requires very little training, and it functions well in noisy, busy trading environments," Mr. Marshall said.

The Interpreter 6000, which consists of small hardware unit that sits under a trader's video monitor, can be adapted to bank trading operations like bonds and foreign exchange, Ficomp officials said. The company has held discussions with banks to buy the systems, but none have committed to it yet, they added.

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