Celent Securities & Investments Newsletter, December 2012
Analyst’s Point of View
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
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
- Technology in European Fixed Income: Time to Open Pandora's Box
- Risk Management in China: Trends and Challenges for Banks, Asset Managers, and Securities Firms
- Chinese Payments and Sanctions Compliance
- Innovation in Focus: New Trading Models in US OTC Fixed Income Derivatives: Let Them Have Order Books
- Execution Quality in the NYSE Market
- Execution Quality in the NASDAQ Market
- Indian Derivatives Markets: Illusions of Competition?
- Client Reporting Tools Update 2012: An Overview of the European Market
- Malpractice in Capital Markets: Changing the Organizational Blueprint
- Extraterritoriality of the Dodd-Frank Act: Dealing with New CFTC Regulations
- Taiwanese Derivatives Market
- Equipping the Front Office for the New Risk Environment
Research in Progress
- Reference Data Management: Emerging Paradigms
- Basel III and Liquidity Risk Solutions
- Managed Accounts: Trends and Developments
11 December 2012
MphasiS with Celent: Innovations in Institutional Client Onboarding
16 January 2013
Technology in European Fixed Income
For more information on the above events, contact firstname.lastname@example.org or call +1.617.262.3120.