Last week the capital markets technology community descended on New York for the annual Waters Rankings ceremony, and while John was stuck in London while others got to party, it got him thinking about what makes for the ideal technology provider for the buy side.
The last award I received was during my school days for a small, yet profitable, venture a few friends and I put together during a school fair. By pooling our collective video game consoles, we created a mini-arcade where fair-goers were able to play a game for 15 minutes for a small fee.
Unsurprisingly we were swamped with bored kids dragged outside by their parents who, rather ironically, probably wanted them to stop playing video games and get some fresh air.
By the end of the day we had made a substantial profit, delivered what you would now call a "market-leading solution", and received a special award for our endeavor from the school principal.
There isn't a great deal of cross-over between this charming anecdote and our Waters Rankings Awards, but it does serve to highlight that by giving the market what it wants, you will be rewarded with recognition and possibly a nice trophy.
Objectively speaking, there is no vendor or service provider out there that can give the buy side exactly what it wants 100 percent of the time; if there was then there wouldn't be any point, we'd just have the one award given annually to The Omni-Provider.
In the absence of this glorious solutions overlord, what does it take for a buy-side vendor to be the very best, like no-one ever was? (Sorry, not sorry.)
While compiling my write-ups for some of the Rankings winners, the most notable theme or driver running through each was increasing regulatory requirements, regardless of the category.
Reporting and compliance are a major headache for asset managers, with many turning to outsourced solutions as a viable alternative. In an ideal world, a specially-created utility would work in tandem with a regulatory body to ensure its offering reflects current legislation as well as any forthcoming changes, giving the market exactly what it needs to remain compliant.
There are a whole host of legal and operational reasons as to why that model simply cannot exist, but we're talking about ideals here. Regulatory-focused vendors are everywhere, with the somehwat cringe-worthy term "regtech" being bandied about with alarming regularity these days, but there is also the onus of asset managers to get some work done, too. Or, as many are choosing to do, simply outsource the whole thing.
Look, Listen, Learn
It may sound cliché, but the key element is client feedback; asset managers, like everyone else, want to feel like their opinions are being heard and understood.
For example, if an asset manager is struggling with big data and wants to improve the trading analysis it uses on a more granular level (as many are seeking to do), it's no good if the vendor they are discussing their issues with then comes out with a release on a totally separate area of operations.
The winners of Waters Rankings, as well as the BST and SST awards, are more often than not those that have carefully gauged market conditions, spoken extensively with both their client base and prospective users, and invested in proactive technologies that keep asset managers one step ahead of curve.
If you read my inaugural BST editor's letter last week you will have noted my stance on the global phenomena of Pokémon Go. Despite this, I too have fallen victim to this imperfect, frustrating, addictive, grind of a game. It's destroying my phone and data-plan, but my god, it is stupidly fun.
PRs have also jumped on the monster-catching wagon, as capital markets news releases now have Pokémon-related themes shoehorned in for no practical reason. Memo to PRs: Stop it.
In slightly more relevant news, I will be looking at how the continued increase in block trading is putting increasing pressure on OMS/EMS solutions used in the buy-side for my next feature; if this is an issue you'd like to speak to me about, drop me an email at [email protected]
Should regulators take a more active role when it comes to AI oversight, or leave it to the professionals? What will M&A look like in 2018?Subscribe to Weekly Wrap emails