https://tabbforum.com/opinions/buy-side-trend-watch-harnessing-alpha-with-innovation/ Wayne Curry - Bespoke dashboards that mingle internal and financial data, visualize ideas, and share the results across the firm can also enhance the scalability and productivity of the idea generation process. This strategy boosts capabilities and delivers transparency more efficiently.
https://tabbforum.com/opinions/unintended-consequences-shrinking-sell-side-research/ Douglas Christensen - Transparency has led to cost pressures and a reduction in research spending, which has had the unintended consequence of brokers and banks scaling back on the cost of coverage and ultimately has led to diminished output of published research.
https://tabbforum.com/opinions/why-you-are-probably-using-the-wrong-technology-in-capital-markets/ Steve Grob - Some firms have already seen the writing on the wall. Hg’s Director of research, David Toms, points out that Goldman Sachs has increased its spend on technology by 48% while simultaneously reducing staff expenditure by 13% over the past 5 years.
https://tabbforum.com/opinions/trading-favors-the-technologist-the-buy-side-technology-arms-race/ Campbell Peters - While buy-side firms have built out their technology and analytics teams considerably, most firms still outsource execution algos from their brokers. This is especially true for fundamental firms, as quantitative firms are more likely to develop some of their algos in-house. These quant firms have been the most willing to adopt emerging technologies, such as machine learning and AI, since they have the resources to develop and test the functionality in-house if needed.
https://tabbforum.com/opinions/buy-side-turning-to-technology-to-meet-todays-challenges/ Monica Summerville - The practical reality of this means robotic process automation (RPA), as opposed to AI – e.g., machine learning (ML) and Natural Language Processing (NLP) techniques – are more likely to be implemented to start.
https://tabbforum.com/opinions/unbundling-is-upending-asset-management-as-we-know-it/ Larry Tabb - Increasingly, the large buy-side firms are embracing unbundling, as it enables them to better manage their business. It provides greater clarity around what research managers need, the cost of obtaining that information, and the service models it entails. It also allows buy-side traders to focus their attention on sending their orders to the most effective execution desks, instead of allocating those trades to research brokers based on their investment ideas, even if their trading desks are not truly effective. Also See: Industry at War with Itself, and Unbundling’s Impact on the Buy Side-Sell Side Relationship
https://tabbforum.com/opinions/the-importance-of-research-and-how-you-pay-for-it/ Christopher Tiscornia - Westminster Research Associates, which is owned by Cowen Inc., has always been a strong proponent of allowing the use of client commissions to pay for research, particularly through commission sharing arrangements (CSAs). In the simplest form, trades are executed with a broker-dealer, generating commission credits that are housed in a CSA account with a broker-dealer such as Westminster, a pioneer in the business. These credits can then be used to acquire research from a variety of sources, including independent research boutiques as well as the research departments of larger investment banks in accordance with Section 28(e) of the Securities Exchange Act of 1934. As will be discussed here, we believe it is important that managers continue to have the flexibility to use commissions to acquire research.
https://tabbforum.com/opinions/heres-how-outsourced-and-supplemental-trading-solutions-reduce-operational-risk-and-cost/ Daniel Dispigna - Amid these challenges, one of the standout pain points is the sheer amount of work involved in running operations on the buy side, particularly as it relates to managing relationships with brokers. Liquidity fragmentation means it is now essential for firms to have relationships with a wide variety of brokers globally in order to diversify into new markets, instruments and regions, while also making it possible to participate in hard-to-trade names. But addressing one issue sometimes creates another; building and maintaining lengthy broker lists creates work of its own, from trade settlement to the complexities involved with managing such a wide network of counterparties. And if investors opt to keep their broker lists short, they are effectively limiting their access to invaluable sources of information and liquidity.
https://www.thestreet.com/technology/what-is-fintech-14885154 What Is Fintech?Anne Sraders - Fintech is a term used to describe financial technology, an industry encompassing any kind of technology in financial services - from businesses to consumers. Fintech describes any company that provides financial services through software or other technology, and includes anything from mobile payment apps to cryptocurrency. Top 10 Fintech Companies to watch in 2019 https://www.thestreet.com/technology/fintech-companies-14891479 As of 2019, there are 39 VC-backed fintech companies worth $1 billion - with a combined valuation of $147.4 billion, according to CB Insights. The 11 Biggest Fintech Companies In America 2019 https://www.forbes.com/sites/jeffkauflin/2019/02/04/the-10-biggest-fintech-companies-in-america-2019/ Jeff Kauflin U.S. fintechs raised $12.4 billion in funding, or 43% more than 2017, reports CB Insights. That growth outpaced the 30% increase in venture investments across the entire U.S. market. And fintechs will need those dollars—they tend to burn about two to three times as much cash compared with other startups, according to an analysis by Brex, likely due to factors like regulatory hurdles.
https://tabbforum.com/opinions/unintended-consequences-conflicting-regulations-the-sec-and-mifid-ii-requirements/ Douglas Christensen - Investment firms are moving more and more toward a situation in which they will be paying for research from profit and losses (P&L) instead of using client money. This isn’t necessarily due to firms seeing unjust value in using client money, but more likely a reaction to conflicting regulations across regions and requirements. Inconsistent regulations across regions have forced firms to dip into P&L to pay for research services instead of paying out of expenses of the fund. Investment firms, particularly the large and global, cannot be seen as treating clients differently based on their location. These changes have reverberated across the industry and are potentially doing more harm than good.