The theme of the report accompanying this week’s print issue of Inside Market Data is automation and electronification in fixed income markets, the advance of technology and how the bond markets are making use of tools and techniques from cloud computing to co-location and from algorithmic trading to allocation.
The fixed income markets are being split in two directions, with the most liquid asset classes migrating more to exchange-like platforms, which will generate larger volumes of better quality data, prompting demand for the same kinds of technologies that are now pervasive in the equities markets, while illiquid assets that require complex and time-consuming pricing processes are driving adoption of high-performance pricing tools and burst-to-cloud abilities.
With a market ripe for re-shaping by technology vendors, one might expect more interest in last week’s SIFMA (which incorporates the former Bond Market Association) technology show in New York. But the event—much-maligned in recent years for falling numbers of exhibitors and attendees—still had empty spaces, despite being even smaller than previous shows, and though SIFMA had made some improvements (touch-screen registration booths, intimate mini-booths in the “innovation” space, soft couches for impromptu meetings, and free food and drink), lacked any real buzz overall.
The biggest buzz was generated by Microsoft, which handed out Surface tablets to select attendees—though they may have missed a trick insofar as the recipients stuffed the still-boxed Surfaces into their tote bags, presumably as a birthday gift for their kids (not that I care about not getting one, because my iPad is surely so much more awesome).
Small vendors and startups got the most out of the exhibition (one suggested rebranding the show as an innovation expo for startups), since it placed them squarely in front of a still-reasonably large audience of key target clients. One small provider quipped that a 10-minute pitch at last week’s STAC event delivered better returns than two days at SIFMA—though shortly thereafter, a passerby agreed a huge deal at the vendor’s booth.
If anything, the larger companies—at least, those that were present, since all data vendors have already abandoned the event—seemed the most dissatisfied. And while some suggested this is simply because everyone already knows their offerings, others were adamant that to regrow the show, SIFMA needs to focus on signing up these large vendors as exhibitors, who will draw in their large client bases in terms of attendees, and encourage—sometimes even subsidize—their smaller partners to join the exhibition.
But to make the show appeal to these key players, SIFMA needs to create a large advisory board of exhibitors (if it hasn’t already) to find out what works for each of them, tap into their ideas, and figure out how it can utilize those ideas for the benefit of the show overall, to pound out some good ideas before trying to pound out contracts for next year’s exhibition. Certainly no one was shy about sharing their opinions with me.
Because if SIFMA can’t make the show appeal to bigger vendors, it risks these companies banding together to start their own technology expo. Several have run their own individual client events on the same days as SIFMA in the past (no doubt in part contributing to its decline). And their size gives them the ability to deliver a double-whammy to SIFMA: the withdrawal of their own support, plus they could subsidize their partners’ attendance at their own show. These companies don't support exhibitions out of charity, and I can imagine others slavering over the revenues that could come from running such a large expo.
And speaking of charity, some good news: one thing that dragged people away from last week’s SIFMA show was a charity golf event organized by AITEC (the Alternative Investments Technology Executive Club), which raised $150,000 for the Wounded Warrior Project, an organization that assists veterans and serving armed forces members injured on or after Sept. 11, 2001.
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails