2011 Preview Part 1 – More of the Same
It seems just the other day that maxim ‘doing more with less' was on everyone's lips. That applied to vendor organizations and end-users alike: both were looking to increase the value they offered their core clients by extending their services on offer, while at the same time doing so with significantly reduced headcounts. That was approximately two years ago as the industry emerged inexorably from the worst market downturn in living memory.
Now, with the 2008 thankfully in the rearview mirror, we're about to enter another period where there is almost as much uncertainty. Everyone I've spoken to recently has indicated this uncertainty in one way or another - obviously buy-and sell-side firms' perceptions are shaped by the idiosyncrasies of their respective core businesses, as are the various perceptions from the vendor community, determined by the constituencies they serve. There is, however, a universal knock-on effect resulting from this uncertainty: it has led to an industry-wide ‘wait and see' stance, the first theme that I believe will dominate for at least the first six months of 2011.
There are various factors in play here: the dire US debt scenario - both on a national and a state level - will weigh heavy on investors' minds. Inflows to the buy side will by and large be modest, especially in the alternative space, which means that for the foreseeable future, buy-side firms will be managing much the same in terms of the size of their asset pools as they did during 2010. And given expectations that returns in traditional markets - that is the say equities - will continue to be average at best, the outlook for the immediate future looks pretty bleak.
All market participants, including vendors, will continue their efficiency drive, but this should be seen as a good thing, akin to the ‘new normal', where the excesses of the past have been jettisoned and substituted by new levels of efficiency across the board, in an industry way overdue its leaner and meaner wake up call.
Unless something remarkable happens in the global financial markets, growth for the foreseeable future is going to be modest. Sure, the BRIC countries continue to boom away, but is China's growth with its ballooning chasm between its official and unofficial inflation rates sustainable, I wonder?
All of which means one thing: If you cannot enhance the bottom line through growth, you're going to have to look elsewhere, and where better to start than by improving your operational efficiency? Personally, I think it's an exciting time where the market will reward innovation and nimbleness, qualities toward which all financial services organizations should aspire.
Next time: Regulation
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Hub to lay off 20% of staff, sources say
Hub’s CEO says this is simply a case of a startup trying to stay nimble and efficient; others say it points to deeper issues.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Waters Wrap: The rise of AI washing… and regulation washing?
The SEC recently levied fines against two investment advisors over “AI washing”. Anthony takes issue with the announcement.
This Week: Brown Brothers Harriman, BNY Mellon/Nvidia, Cboe, Eurex, and more
A summary of the latest financial technology news.
This Week: SS&C unveils T+1 preparedness scorecard; S&P/DTCC; SmartStream & more
A summary of the latest financial technology news.
The bank quant who wants to stop genAI hallucinating
Former Wells Fargo model risk chief Agus Sudjianto thinks he has found a way to validate large language models.
Prepare now for the inevitable: T+1 isn’t just a US challenge
The DTCC’s Val Wotton believes that firms around the globe should view North America’s move to T+1 as an opportunity—because it’s inevitable.
Man Group’s proprietary data platform is a timesaver for quants
The investment firm’s head of data delves into its alt data strategy and use of AI tools to boost quant efficiency.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest