Cognito Europe
- Protecting franchises remains a key driver for investment banks to invest in e-commerce
- Successful bank e-commerce offerings involve all electronic channels and cover the whole trading lifecycle
- Of the top-20 banks, 14 are implementing or are planning to implement “data science” solutions
LONDON – 27th October 2014 – A new report from GreySpark Partners, a leading London-headquartered capital markets consulting firm, explores the latest trends in investment banking e-commerce. The report, Trends in E-commerce 2014, highlights that banks, in order to remain competitive, should adopt cross-channel e-commerce solutions that employs scientific data analysis to improve client services as well as the bank’s own profitability from facilitating their client’s trading activity.
In 2014, banks have used e-commerce channels to protect their franchise. The GreySpark survey of over 100 capital markets participants reveals that banks are only active on the e-commerce channels that successfully attract and retain buyside clients. Banks should be offering services that cover all electronic channels because the technological maturity of their buyside clients varies, as does the general level of electronification of trading from one asset class to the next; which makes sellside services that allow for trade execution through every e-channel relevant. In addition to trade execution, buyside firms also expect banks to electronically provide them with pre- and post-trade services.
GreySpark has also observed that sellside e-commerce offerings are increasingly using scientific data solutions to gain or retain buyside client business. These types of data science-centric capabilities are focused on tailoring trade pricing to improve the overall client offering while also maintaining profitability in the trading for the banks. Comprehensive, data-driven e-commerce services make buyside client interaction with their banks easier. GreySpark’s report identifies opportunities for banks to prioritise improvements in their e-commerce offerings to serve buyside demand for e-trading, and it also provides a framework that banks can use to prioritise investments in their franchises depending on each bank’s client base and technological capabilities.
Frederic Ponzo, managing partner at GreySpark, said: “In the same way as improvement in user experience was the dominant initiative across many banks in 2013, in 2014 banks have been catching up with retail industries in their use of data science. Those benefits are of two kinds: a better, contextualised and personalised service for clients, and the exploration of cross-sell opportunities for banks.”
Anna Pajor, lead author of the report, added: “GreySpark has observed an increase in the number of new technology vendor initiatives that aim to improve information flow within capital markets. Those technology tools offer solutions that can extend the capabilities of a bank’s e-commerce offerings to their clients, with a limited amount of development effort needed by the banks in order to provide those offerings.”
The Trends in E-commerce 2014 report is the fourth report in GreySpark’s annual series of reports, Trends in E-Commerce and Electronic Trading. Previous reports in the series covered e-commerce and e-trading trends in fixed income, FX and in equities.
For further information on GreySpark’s research, please e-mail: press@greyspark.com
