Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
What are the major themes you are observing within the buy-side
trading community?
Buy-side teams have coped incredibly well with pandemic-induced
workplace change. To have been successful in 2020 meant that one
had to ensure operational resiliency, ongoing access to liquidity
and optimal cross-asset execution scale. As organizations settle
into the new normal of hybrid working, we hear heads of desks
making investments in areas that will make them more agile and
efficient. As policy on rates remains soft, there is increased
pressure to generate alpha and drive operating costs lower.
We have observed several key trends, each of which is at a
different stage of maturity. Trading desk efficiency is paramount,
traditional trading models are being questioned and firms are
targeting step change in operational alpha and scalability. We saw
the pandemic accelerate consideration for outsourced trading
solutions and further adoption of electronic all-to-all trading
protocols and portfolio trading. It also prompted a push towards
multi-asset Order and Execution Management System (O/EMS) solutions
and further integration of cross-asset pre-trade intelligence.
Additionally, with a need for traders to focus on higher-value
tasks, we see increased investment in trade automation through
leveraging machine learning (ML) and artificial intelligence (AI),
along with a desire to digitize and align primary and secondary
market workflows.
As customers strive to maximize efficiencies, what are the
areas in which you see innovation?
The systems and tools utilized to access and engage in primary
and secondary market activity have limited - if any - interaction
between them. Trading desks will typically follow a completely
different process when conducting decision support and managing
orders for primary market activity when compared to secondary. The
former is more manual and resource intensive, and customers are
seeking ways in which primary can become more efficient and
integrated into the same platforms used for secondary workflows. We
see customers questioning the status quo, which has driven
significant technology investment focused on merging these
workflows.
How is IHS Markit helping firms achieve their objectives with
technology and market data intelligence?
As institutional investors seek greater efficiencies, they are
not only looking for alignment of primary and secondary workflows,
but also more timely, seamless navigation and transition between
primary and secondary decision lenses. We are helping customers
achieve this in several ways.
Our InvestorAccess platform was the first service to connect the
buy-side and sell-side such that deal information, orders and
allocations can now flow electronically between investors and the
banks' primary deal platforms. We have taken the next step to allow
buy-side platforms (starting with our own thinkFolio) to integrate
the InvestorAccess network so that investors can manage all of
their primary and secondary workflow in one place. This
collaboration and end-to-end electronification results in
streamlined workflows, reduced operational risk, and enhanced
compliance and audit capabilities for our clients' dealing
operations.
Further, we see a unique opportunity to integrate our rich
universe of cross-asset pricing and liquidity intelligence to
enrich decision support analyses for customers using our software.
For example, thinkFolio customers will be able to seamlessly
monitor and engage in the primary market opportunity set through
the InvestorAccess integration, while also having the ability to
leverage our full suite of secondary market sector and issuer
intelligence to aid them in pre-trade and relative value analyses.
This can all be delivered via a single, interoperable desktop,
end-to-end digitized workflow and enhanced user experience.
How is the front office's appetite for data and analytics
evolving? For which types of data and analytics services do you see
the most demand?
We see increasing demand for pricing analytics and liquidity
data that is dynamically updated across the full range of Fixed
Income asset classes (bonds, loans, credit default swaps (CDS),
etc.). This interest can be attributed to desire for further
electronification and recognition that better pretrade information
can drive trade automation efficiencies, strengthen best execution
confidence and unlock additional liquidity.
The buy-side has increased acceptance to look beyond execution
platforms alone and to utilize leading pricing sources and
liquidity data to enrich their tool kits. Leading pricing providers
can proficiently collect and clean unstructured data and create a
composite pricing that is updated throughout the trading day.
Furthermore, they can use technology to extrapolate observed data
points on liquid bonds to imply movement in the illiquid
counterparts helping to identify dislocations of price and relative
value.
For more on these topics, please download the full paper
below:
Posted 10 November 2021 by Brett Schechterman, Managing Director, Global Head of Business for thinkFolio, S&P Global Market Intelligence and
Karthick Chandrasekaran, Executive Director, EMEA Business Development, S&P Global Market Intelligence
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
