I thought I would share with you some of the thoughts following last week’s Digital FX Awards, especially the odd one or two who thought fit to harangue me afterwards!
I would make two general points to start with. Firstly, every single institution we saw had an excellent e-FX offering. To be very clear about this, we only go and see institutions that are either new to the market with a platform or who have been recommended or mentioned to us by users of platforms. In other words, a bank has to hit a certain threshold before they are considered, which means, inevitably, the margins are narrow.
The second general point is to reaffirm that the Digital FX Awards are not judged on volume or by votes – both are open to abuse (and it is with this point that I highlight how stringent we are in checking who is voting for whom in the Digital Markets Awards which are live now on the P&L website.) The Digital FX Awards are, hopefully, an accurate reflection of general sentiment amongst users overlaid with a few points of differentiation.
And it is those points of differentiation that can separate one user from another. It is interesting to me how little some people know about their competitors' offerings which tells me that they are either not listening to their clients; or their clients don’t think much of their competitors’ offerings to tell them about it! Personally, I believe this relative lack of knowledge is a good thing because it breeds innovation and original thinking, but it does become something of a pain when one publishes awards and has to explain repeatedly to people that “yes, the winner does provide that and it’s very good.”
Given my recent (and historic) issues with an airline (and don’t worry BA, you’re still behind United in my airlines I would least like to fly with list) I thought it would be helpful to use an airline analogy. Trading platforms, like airlines, get you there in pretty much the same fashion. The different classes look the same and indeed if you are talking long distance flights (especially between Europe and Asia) they all leave at pretty much the same time. So why choose a particular airline? Well, one or two leave at different times. For those of us that do not travel at the front of the plane, doing a day’s work and then getting on a plane at 10PM, flying for 23 hours (or 33 – thanks again BA!) and then getting off first thing in the morning at your destination makes for one hell of a long day. Therefore I occasionally choose an airline that leaves London at midday and lands in the evening at my destination.
What does this mean, apart from the fact that I am becoming an obsessive anorak over airline timetables? It means that one trading platform is as good as the next, but some either support everything (fly everywhere), have some functionality that is different and useful (fly at different hours), or, of course, do both.
I think people’s passion for their platforms does them – and ultimately the industry – a credit, but just as emotion can destroy a good trader, so too can it a good service proposition. As I have said in many different fields of our industry, if certain firms (and this is the downside of the lack of knowledge I mentioned earlier) worried less about what their competitors were doing and focused more on making their own service better, their whole contribution would be more positive. The human overlay to these platforms can often be a differentiator (just as, to keep the airline analogy going, good up-to-date information about your flight and a prompt response to any disruption can be for an airline).
Personally speaking – and with 11 years of touring the banks looking at the platforms to fall back on – I would say the most successful ventures have always involved good human capital working with and on, good technology. The two are not mutually exclusive and are only likely to be successful if they are blended together well. Most banks achieve this, but, and it’s a big but (and my message to those who gave me a hard time last week!), some go further.
In the past I have been derided in some quarters for promoting what they dismissively term “bells and whistles”. In truth there was some rationale behind that because I was probably ahead of what several banks could achieve and what was physically possible under their budgets.
The fact is though, we are now in an era where everyone has the basics pretty much right. Some banks will always win business on the back of their size and willingness to warehouse larger risk, but for the day-to-day bread and butter business there is a lot more competition. That means a bank needs a differentiator and what is that differentiator likely to be? Something that allows the client – if they wish – to operate in a slightly different, and for them more efficient, manner.
I know that every airline will get me to my destination in much the same fashion and at much the same time. This means that I don’t really care who I fly with. If one of them does something a little different, however, in addition to the normal level of service, they are going to win valuable business. The same goes for trading platforms. Resting on one’s laurels is never a good idea and whilst I accept that economic arguments have to come into it, if you offer three or four reasonably valuable clients something the others don’t, you will soon find they become very valuable clients.
Of course, into the bargain you also impact a competitor’s business so you get two for the price of one, because all consumers appreciate it when a service provider goes a little further and makes them feel they are working for them – it breeds loyalty. This may seem like preaching to the converted but I am convinced there are some in our industry who have become complacent and forgotten the value of going that extra mile.