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Best Emerging Markets P&L Report Card As data has continued to improve in emerging markets so too has the level of competition risen amongst the banks for what remains, still, high value business. This data has been driven to a small degree by more dealing (or pricing) on public platforms, but generally speaking, given fears of market impact (and given how concerned clients are about it in G10 they must be traumatised when it comes to EM!) emerging markets remains a single dealer, or small aggregation, game. The aforementioned improvement in data has meant better analytics, and it is noticeable that those banks offering good analytics packages have extended their offering in emerging markets – clearly this is an area of differentiation.
2018 Product of the Year P&L Report Card Contenders are thinner on the ground this year, thanks mainly to “that regulation” stealing the limelight and the development dollars, however there are one or two areas that have seen progress. The first, as we hinted at earlier, was in the control space – given the client not only control over their execution, but also helping them to run their business. Citi’s Command Centre is an excellent product, as we have already noted, and the last year saw several players roll out their own version, although, inevitably, they are not as sophisticated and advanced at this early stage as the pioneer they are all trying to chase.
Best Commodities Platform P&L Report Card For many years this award was something of a foregone conclusion. While the many banks offered various products around precious metals, JP Morgan and Goldman Sachs stood out by having significantly stronger and broader commodity suites, with the latter traditionally winning this award. In 2016 this dynamic began to change. The gap between these two banks started to close, not because Goldman Sachs has stood still, but rather because JP Morgan clearly put a lot of effort into improving its commodities offering, adding an impressive range of new products and functionality.
Best Rates Platform P&L Report Card Like the boring guy at a party, we at Profit & Loss have been waiting for this award to disappear, but just as the boring guy occasionally says something funny, every year we talk about cutting the category, only to be shown enough functionality to keep it in! That should not be construed as meaning there is a lot out there, fixed income and credit on single dealer platforms remains a fairly closed shop, delivered either via a futures offering or, in the case of some of the bigger players, with a long list of Rates products for trading on a principal basis.
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 discernible 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.
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.