FridayNewsletter Exclusive: Fixed Income Sales Workflow Systems – Some Assembly Required
October 6, 2016 \ 3 Comments
Full Article: FridayNewsletter
Unfortunately, despite the abundance of these market solutions, Sales Workflow Systems have yet to transform any of the corporate bond dealers that utilize them into the efficient, synergy-capturing, riskless-principal-trading powerhouses that they want to be.
Fixed income flow sales is desperately trying to protect whatever is left of the franchise. The franchise is supported by the new issue machine that is greased by the low interest rate environment. It’s not only trying to compete with automation but with the shops that are more aggressive and are based on agency trading. The are willing to work for less bps and more aggressively. Resisting the change unfortunately has not been proved very successful by history. it happens eventually and then with greater speed.
Interesting piece co-authored by two people very much in the know. A few thoughts: 1. Necessity: If FI is an industry that requires people, then this alone will tell you whether an “SWS” is needed. Look to any other industry that requires salespeople to do a lot of heavy lifting and see if they use a “SWS”. The answer is a resounding “yes”– and these tools have been utilized for years. 2. Adoption: “SWS” tools are deeply integrated multi-user tools with inter-dependencies amongst those users. One user does their part and another user gets value. If one user doesn’t do… Read more »
Kudos to CodeStreet (and the author who was there at the beginning) for seeing the potential that SWS systems could have. These sorts of systems are completely necessary for any agency broker to find liquidity quickly (before her competitor does) and cheaply (have you noticed what’s happened to broker commissions over the last 10 years?). There is an obvious example of where this has worked, and it’s the secondary wholesale market. The interdealer brokers have been using a variety of SWS systems for decades, beginning with the green screens in Treasurys. Today, the brokers are using hybrid systems for Emerging… Read more »
Blackrock’s Richard Prager: The Liquidity Is Out There – Institutional InvestorMarch 18, 2016
Everyone is Worried About the Thing Markets Need Most, But They’re Not Asking the Right Questions – Business InsiderMarch 25, 2016
US Companies Overpaying for Bonds; Banks May Be to Blame – ReutersMarch 31, 2016