Explain the forces that pushed markets toward electronic trading

Electronic trading spread because it lowers costs: computers match orders more cheaply than floor traders and dealers. It is also faster and more accurate, reducing errors in execution and settlement, and it creates complete audit trails that help regulators and compliance teams. Regulation encouraged competition among trading venues and required best execution, which favoured systems able to route orders across venues. Growth in trading by institutions and in algorithmic strategies created demand for speed and automation, while technology costs fell. For a portfolio manager, the result is narrower spreads and lower commissions, but also fragmented liquidity and competition from faster traders. A trap is assuming lower quoted spreads mean lower total trading costs.