Celent Securities & Investments Newsletter, December 2012

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6 December 2012
New York, NY, USA

Analyst’s Point of View

Vendor Overflow?

Last month, we were speaking with some clients in New York about how we think there are some very interesting technology offerings trying to respond to the changing needs of the fixed income market infrastructure in Europe. One of them asked us, "But are there not too many vendors?"

"Maybe," was my initial (and perhaps too quick) response. "In the sell side and trading platforms space, there will be space only for either the bigger ones that offer broad-based products (OMS, TCA, CLOB, etc.) or the small ones that have created a niche in a specific product catering to the needs of specific clients (pairing engines, matching sessions, or auctions for credit)."

But then I reconsidered and had an answer I preferred. "Actually, no, there are not too many vendors, and even the more generalist products that the big vendors sell have their clientele. Why? Because the trend of these markets is electronification."

Even if fixed income markets are less liquid than they have been, more volatile, and risky, and therefore the percentage of electronic trading in fixed income has only been stable or decreasing in cash products in Europe (as we mentioned in our October sizing report, Fixed Income in Europe: Ready for the Tornado?), well, despite all that, this is what the markets will always do: become more technologically intensive, less manual, and more automatic.

Maybe not all of the solutions of all the technology vendors will have record sales, and maybe only a few of them will really be disruptive to the market, as we will mention in an upcoming report looking at exactly which technological solutions will change the fixed income market in Europe, but at this stage there is still room for all these vendors.

Joséphine de Chazournes
Senior Analyst

P.S. I am presenting a webinar on my recent reports Technology in European Fixed Income: Time to Open Pandora's Box and Fixed Income in Europe: Ready for the Tornado? on January 16. If you are interested in attending, please register at http://www.celent.com//node/30694.


Chart of the Month

From the Celent report Equipping the Front Office for the New Risk Environment


Celent Published Reports


Research in Progress

  • Reference Data Management: Emerging Paradigms
  • Basel III and Liquidity Risk Solutions
  • Managed Accounts: Trends and Developments


Events

11 December 2012
Webinar
MphasiS with Celent: Innovations in Institutional Client Onboarding

16 January 2013
Webinar
Technology in European Fixed Income

For more information on the above events, contact info@celent.com or call +1.617.262.3120.