Trends in Equities Trading 2019

In 2019, the economic precariousness of the squeezed middle – those stuck between the small number of volume-driven global flow monsters and a long tail of niche specialists – is coming to a head and even formerly leading Tier I global investment banks count amongst its ranks. The impacts of these developments are profound, both from an organisational strategy and role perspective, as well as its implications for technology requirements going forward.

Investment banks have become increasingly disintermediated from the most valuable parts of clients’ trading lifecycles and, consequently, historical business models focused on highly manual, labour-intensive client servicing across a wide range of products, geographies and services have become economically unviable, with most banks forced to pursue niche strategies instead. The report details this specialisation of individual sellside cash equities and listed equities derivatives franchises over the past decade.

Shifting business model realities for managing client relationships and investment banks’ role in the client trading lifecycle are profound. GreySpark explores the paradigm shifts involved in the creation of successful digital investment banking franchises in the cash equities and listed equities derivatives space. These shifts further result in significant changes to banks’ technology stack requirements as they enter the third wave of sellside listed equities product technology acquisition, focused on replacing legacy solutions – both in-house and vendor-provided – with new fit-for-purpose that address both current market realities and future-proof institutions technology stacks in light of not only the business changes, but larger technology trends in the capital markets space.