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Best FX Options Platform P&L Report Card Although there is much happening in the broader market, specifically around clearing and other regulatory related changes, in the single dealer platform space not much has changed in terms of FX options. Yes, most banks have added products to their roster – mainly second generation exotics aimed at the private banking world, something most banks seem extremely interested in – but in terms of functionality not a lot has changed. One reason for this is the lack of real growth in FX options trading - if new volume is not coming then why spend investment dollars? Another reason is options, above all other products, benefits from familiarity when it comes to building a structure or even pricing a single ticket – a generation of traders has grown up with the same look and feel. They know where to look, so clearly it works, therefore why change it?
Best Mobile Platform P&L Report Card For the second year in a row we are able to celebrate more clients coming around to the benefits of mobile trading - and for the second year in a row we cannot point to any new apps on the market! The obvious cause of this lack of discernable movement is likely to be the ubiquitous MiFID II, which, as we have already stated, dominated thinking and budgets last year. Another factor may be – and we find this amazing in 2018 – some lingering doubts over the technology’s suitability and the control framework around it. After all, if a firm is still battling to come to terms with controlling its business activities in the office, as man
Best Analytics Package P&L Report Card This award was previously entitled the Market View Award but we have decided to rename it to better reflect the original requests from readers and users of the platforms that we look at, which delivers good analytics in a flexible fashion and makes it easy to understand what is happening and – importantly – what is likely to happen, when a client is preparing to trade. We were unsure as to the validity of the award when it was first requested, if we are being honest, but the events of the past two or three years, during which clients have started to look much more granularly at their execution processes and have also at the same time had more of the decision making thrust upon them by changes in the regulatory and banking landscape, mean it is more relevant than ever.
2018 Client Experience Award P&L Report Card It is interesting to note how many banks are suddenly re-focused on the user experience or UX. The last time we saw this level of enthusiasm was probably 2010 following the high profile impact of Matrix, which says something about both clients’ rediscovered willingness to engage with the single dealer platform, as well as the push for greater analytics capabilities. Whatever the driver, users of platforms are much more demanding than they used to be in terms of how easy it is to use, move around and find what they are looking for. This also means that to stay at the top of the tree some attention has to be paid to the UX and this was difficult in a year in which MiFID II dominated so many budgets and resources.
P&L’s One to Watch in 2018 P&L Report Card With the shackles being thrown off at so many institutions in terms of budget and resources, this is an interesting category. Historically this award has been about the late movers, however last year we changed tack a little to reflect where we think the big moves will come from, meaning even those institutions with all-singing-all-dancing platforms were contenders. The development cycle’s length means it can be tricky to identify a mover in the succeeding 12 months and this can probably be used as an excuse for last year’s winner of this award, Bank of America Merrill Lynch, because the bank still seems to have some way to go. As noted, it is vital that the e-FX teams get budget if it is to continue to compete and build on what are some good, solid foundations.
Editor’s Choice Report Card Famously the most subjective of our awards, last year Colin shifted its focus so that, rather than being awarded to the bank perceived as most likely to challenge for supremacy in the single dealer space, it would go to the one that was most likely to win more awards than it did this year. I agree with the logic underpinning this change – namely that we’re at a point in time where it is unlikely that there will be, as Colin put it, a “serious move” in the single-dealer space – and thus will also embrace this approach. At the outset I’ll note that this criteria clearly disadvantages the platforms that traditionally win the most awards each year, even though we clearly think that these are the most well-rounded platforms available.
2018 Profit & Loss Innovation Award P&L Report Card With the words “MiFID II” ringing in our years we have to say that, yet again, last year was not a great one for innovation. We are sure that some great ideas exist – it’s just that the budget wasn’t available to make them a reality. Another factor in the slow down in innovation we have observed over the past few years is the maturity of the single dealer platform industry, when so many are full service, where do you go? Throw in the fear factor that still permeates the FX banking world and you still have people coming up with ideas, thankfully, but executing them is a difficult and arduous task – thanks mainly to “Dr No”, or the compliance teams as they are otherwise known.
Best Execution P&L Report Card Although several firms have been focused on this for years, it did seem like a year or two ago, a shroud was lifted from so many in the foreign exchange market and they were able to see what best execution really meant. Gone were the days of ringing your mate to get the deal done, or directing a trade to a provider as a “reward” for business elsewhere – suddenly FX execution was a big deal. If we are being honest we still think there are too many clients out there who don't take their FX execution seriously enough, but for those that do, the sell side has come up with solutions that offer plenty of choice.
Best FX Platform P&L Report Card It is fair to say that for the single dealer platform in FX the comeback is complete. Just a few years ago one could hardly move for predictions of the product’s demise, although it is noticeable that few, if any, major banks stopped investing. There was a hiatus of sorts at some institutions, but 2016 saw the realisation that investment is a continuous process and 2017 saw the first fruit of those investment seeds ripen. It has to be said, there are still one or two banks continuing to debate the need for investment in a single dealer platform, however the discussion is probably part of a wider conversation about the institution’s willingness to commit to FX full stop. At the top end of the table, investment dollars are not bountiful by any means, but they are there, and are being used.
Best Platform P&L Report Card Although there is still definitely a push towards homogenising asset classes on the part of some regulators, generally speaking the last few years have seen practitioners realise that FX in particular, cannot fit into any of the boxes they currently have labelled “equities”. Some banks went down this route and tried to lever FICC into the equities model and generally speaking it didn't go well – as shown by those institutions retreating back to their siloed models. This does not mean, however, that a strong multi-asset class offering cannot be built – it most certainly can, but it does mean there are inevitable challenges associated with doing so. First and probably foremost, which business runs the project? Even within FICC there are different drivers and requirements, throw in equities and the number multiplies by several magnitudes.