Tech spending ‘key to fixed-income growth’
Written by Anthony Strzalek
Technology spending is key when it comes to fixed-income market share growth, a new report suggests.
The report, from market intelligence outfit Greenwich Associates, found that the global and regional bond dealers who made the biggest IT investments over the past decade have also achieved the highest levels of market share growth.
The top six US government bond dealers have an aggregate annual technology budget of $26 billion. This illustrates the extent to which technology prowess has become the key determinant of success or failure for banks competing in capital markets, says Greenwich Associates.
Kevin McPartland, head of market structure and technology research at Greenwich Associates, said: “While individual dealers have little control over the total market volume, technology investments that increase distribution while reducing costs represent a critical competitive advantage.
“Spending billions on new technology does not guarantee growth, as having right people and process in place to capitalise on the new capabilities remains critical. Nevertheless, the next generation of fixed-income dealers will succeed only with technology at their core.”