How you can use data and technology to maintain your competitive edge in evolving financial markets

We are in a time of disruption[1], made more acute by the COVID-19 outbreak. Many industries are being forced to adapt. Banks bore the brunt of change post-financial crisis, and now investment businesses are in the spotlight.

There are many key industry trends driving this change, including:

1. Increased competition from passive alternatives
2. Greater regulatory transparency demanded, putting legacy systems under strain
3. Low returns on traditional assets are directly impacting returns

However, out of every crisis, comes opportunity! Those that can use their competitive advantages, such as premium customer service or consistent outperformance, are well-placed to benefit. The greatest potential value is through commercial innovation, and this, increasingly, is predicated on rationalising data and technology to enhance investment potential.

Most investment companies, however, are not prepared (or able) to dedicate sufficient budget or effective resource to these initiatives. Historically, these businesses relied on banks to provide research and data, but the provision of such services is increasingly under regulatory scrutiny and some investment businesses have been left behind. Only a few companies have sufficient engineering prowess and rigour to act decisively, and in most cases, resources are exhausted meeting evolving regulatory requirements.

Fortunately, there are other options. Start-ups specialising in financial services technology (or fintech) offer the independence, flexibility, speed and agility to help institutional investors adapt. The most forward-looking asset managers increasingly focus their technology and data strategies on enabling fintech to create value.

Ultimately, this requires providing access to internal systems and data, which brings with it some challenges. Providing access to data via open APIs in a secure way is the gold standard, with a file-based feed being a pragmatic middle-ground. However, even these steps can be too much for fintech engagement in the context of burdensome compliance requirements and the desire to keep costs low.

At Bond180, our team has many decades of commercial and technological experience in both the investment industry and banking, and we are passionate about helping buy-side clients maintain their competitive edge.

To deliver value, we must ensure we can access data. How? In short, we work with our client’s existing data, process, and technology suite to provide tailored solutions. We can retrieve and process portfolio and transactions data from any source and in any format, for example:

1. Most asset managers are using a service provider for their security servicing and fund administration needs. We can accept back-office feeds and have developed relationships with key players administering trillions of pounds’ in AUM for thousands of clients.
2. We are constantly monitoring the evolving landscape and are in conversations with major software vendors and will offer standard connectors to their platforms.
3. We are also building partnerships with data aggregators, which offer highly secure API-based access to portfolio data.

In all these cases, our client only needs to provide the necessary permissions and we do the rest.

We are highly focused on delivering the best in enterprise data security, and this will be the subject of the next blog. In the meantime, if you want to learn more about how Bond180 can help you meet your future needs, please reach out.

[1] David Caleb Mutua, ‘Goldman Sees Pandemic Spurring Growth in ESG Bond Issuance’, Bloomberg Green, 20 August 2020, https://www.bloomberg.com/news/articles/2020-08-20/goldman-sees-pandemic-spurring-growth-in-esg-bond-issuance.