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.

So even though Neo, eXecute and Velocity are excellent platforms, do I see any of them winning more awards next year than they have this year? One of them might at the expense of the other, but there’s too little daylight between them in some areas for me to risk calling it.

So let’s take a look at the other contenders. Morgan Stanley’s Matrix is a strong platform and the bank continues to really hone in on its strengths, such as the pre-trade analytics and the increasingly real-time TCA tools that it offers, something that resonates that much stronger now that the industry at large has woken up to the need to consider things like market impact in their trading metrics.

Barclays and Deutsche Bank have been conspicuously quiet the past few years, but it seems that both are beginning to build again, and in BARX and Autobahn they have very strong foundations upon which to do this. This means that, provided the increased positivity evidenced by both this year translates into something more tangible and each manages to implement its 2018 roadmap, I would expect both to be in the running for more awards next year.

Goldman Sachs has traditionally been strong in commodities, emerging markets and amongst the hedge fund client base, but where else could it pick up awards in the future? Well the firm is doing some impressive work on the execution side, improvements in its algo offering have been rewarded by strong growth in these tools by its client base. And although it isn’t the only platform provider that is looking to move beyond pre- and post-trade TCA and into intra-trade TCA, some of the visualisation graphics that it is developing for monitoring in-flight trades stand out.

Winner – BNP Paribas

So here’s the first thing – among many – that I like about the BNP Paribas offering: it’s all just so easy to use. I know that superficially that might sound like a peripheral benefit for a platform, but I wouldn’t underestimate how important this is to many clients.

For most institutional and corporate clients, FX trading is more of an operational function than anything else, it’s certainly not a core competency or focus. Yes, they care about pricing – which we don’t judge in these awards – but aside from that, they mainly want a platform that is easy to navigate and simple to use, while simultaneously providing them with all the services and tools that they need.

Centric certainly achieves this and, coming from someone who does not have an FX trading background, I can tell you that it is an incredibly intuitive platform to use.

While BNP Paribas is hardly the only one to have adopted the “app store” model, I would say that its design is slightly better and cleaner than some of the others out there.

The “unbundling” of services and products will continue to be a broader theme in financial markets and beyond, gone are the days of simply throwing more functionality at a piece of technology because now clients want more flexibility to create a streamlined offering that is tailored to their specific needs. This is what the Centric app store offers.

Again, with the execution tools on the Cortex side, BNP Paribas has managed to take something that can be very complicated and simplified it to a point where it becomes incredibly easy to use without sacrificing any of the capabilities of these tools.

I don’t want to repeat what will almost certainly be discussed in another review, but it seems that pretty much every bank on the Street is adopting BestX as an independent third party TCA provider available on their platforms to verify their own TCA. By contrast, BNP Paribas is instead having clients use BestX TCA in the first place rather than as a crossreference, and then looking to add value to clients by providing them with information about how they could have improved their execution, based off this TCA data. This gets into the territory of trade execution advisory services and is designed to create a feedback loop at the portfolio level. Again, it is all very simply designed and presented to the clients, and I think that in this regard BNP might be thinking slightly ahead of the game.

As has been noted in previous years, BNP’s platform offers a wide range of compliance, regulatory and reporting tools that can be easily added to as new regulations come into effect. We mentioned last year that this could come in handy ahead of MiFID II and it would seem that this has proven to be the case.

Another reason why BNP Paribas gets my Editor’s Choice is because every year as we sit down to hammer out our shortlists for these awards they consistently make the top three in a lot of the categories, an impressive feat given the competition in the market. This award is not meant as a consolation prize though, the all round excellence of BNP Paribas’ platform should be evident in our report cards, but rather as a reflection that the bank is actually well positioned to continue developing what it has already built.

Without MiFID II sucking up time, resources and energy, 2018 could be the year that BNP Paribas goes from being competitive in a number of award categories to actually winning them, and that’s why they are this year’s Editor’s Choice winners.

 

Galen Stops

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