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BCG Report – Adapting to Digital Advances: Global Capital Markets 2015

BCG

(BCG Report)

Digital innovation is allowing new value propositions to emerge in sales and trading.

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Comments
  • Hollywood
    HollywoodMay 21, 2015"So the FER want to mandate dealer disintermediation. Great - There are unintended consequences of regulation. Turnover in the corporate bond market is down 48% since 2007 and, it has been reported that bid / ask spread has doubled since Basel III was implemented. News flash - dealers are not required to participate in non-profitable lines of business. See CIBC's recent departure.…"
  • Sundown
    SundownMay 18, 2015"There are very few times that I read a report like this and cannot find someway to critically pick it apart. There is virtually nothing in this report that isn't directly on target in my opinion. One of the best pieces in terms of research and context I have seen that properly explains the intersection between technology, regulation, bank financial reporting requirements (and shareholder demands) with the current market structure. This piece appears to be the best so…"
  • Merlin
    MerlinMay 16, 2015"Agreed, fine paper, and a lot to digest, but the underlying theme of leveraging technology and digital advances has been in vogue for years. Bringing additional focus always helps, but much of this paper only partially applies to the subject of this weekly newsletter, Corporate Bonds. Some of the statements and points throughout just don't apply to the Corporate Bond market. One example; there is discussion of an information shift that has occurred giving clients an a…"
  • Wolfman
    WolfmanMay 15, 2015"This paper forces us to give real thought to the market structure and the structure of the market participants. Is technology going to solve the problems of raising capital and transferring risk that the CMIBs currently solve? What do I mean by this? Does the CMIB repreasent a condition in which an entity is put in place to serve multiple purposes because the technology doesn't yet exist to do so without that entity in place? Does the digital transformation of the ind…"

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5 Comments on "BCG Report – Adapting to Digital Advances: Global Capital Markets 2015"

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Goose
Guest
This is an interesting paper that does a nice job summarizing the challengers to, and the challenges of, the traditional CMIB. I really haven’t seen a paper that manages to cohesively contrast the current state of CMIB with the myriad of underlying digital trends. A lot of material to chew on, but here are a few thoughts. -Competition in the value chain will be a key driver in expanding the trading “crowd” beyond the traditional players in the markets. Entrants targeting specific links will be a driver of cost, and the digital architecture used will lower barriers of entry for… Read more »
Wolfman
Guest
This paper forces us to give real thought to the market structure and the structure of the market participants. Is technology going to solve the problems of raising capital and transferring risk that the CMIBs currently solve? What do I mean by this? Does the CMIB repreasent a condition in which an entity is put in place to serve multiple purposes because the technology doesn’t yet exist to do so without that entity in place? Does the digital transformation of the industry resemble what Uber has done? I think we can consider the implications of a paper like this to… Read more »
Slider
Guest
Agreed, fine paper, and a lot to digest, but the underlying theme of leveraging technology and digital advances has been in vogue for years. Bringing additional focus always helps, but much of this paper only partially applies to the subject of this weekly newsletter, Corporate Bonds. Some of the statements and points throughout just don’t apply to the Corporate Bond market. One example; there is discussion of an information shift that has occurred giving clients an advantage and thus a need to change the model (non-CMIB’s becoming market makers, etc…). In corporate bonds, this is not accurate. Clients always have… Read more »
Sundown
Guest
There are very few times that I read a report like this and cannot find someway to critically pick it apart. There is virtually nothing in this report that isn’t directly on target in my opinion. One of the best pieces in terms of research and context I have seen that properly explains the intersection between technology, regulation, bank financial reporting requirements (and shareholder demands) with the current market structure. This piece appears to be the best so far in mapping out a possible roadmap to the future of where the market is going. Thinking that things will to stay… Read more »
Hollywood
Guest

So the FER want to mandate dealer disintermediation. Great – There are unintended consequences of regulation. Turnover in the corporate bond market is down 48% since 2007 and, it has been reported that bid / ask spread has doubled since Basel III was implemented. News flash – dealers are not required to participate in non-profitable lines of business. See CIBC’s recent departure.

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