In 2010 I wrote Why are people building single-dealer platforms anyway? because I had to. In the technology adoption lifecycle, single-dealer platforms were still pretty much the realm of the innovators and early adopters and as a technology firm, we felt we were still slowly wading across the chasm.
SDP vs MDP volumes in 2009
At the time, the phrase “single-dealer platform” needed a lot of explanation, and while single-dealer platforms (SDPs) already accounted for 25% of all electronic FX volume back in 2010, the business benefits were something of a revelation to all but a few tier 1 and 2 banks. We wrote a Wikipedia article about single-dealer platforms (SDP’s) and started this blog because industry media didn’t feature SDP’s as a category and we were tired of being vaguely referred to in sentences containing words such as “streaming technology.”
Crossing the Chasm
We’d like to think establishing singledealerplatforms.org and dedicating a lot of time writing about SDP’s helped them to “cross the chasm“. But likely it was more than that. Likely, it was (as Moore rightly points out in his Crossing the Chasm), that the right sort of people (who turned out not to be the mainstream) started to listen because we spoke to them about e-trading challenges that involved them specifically.
We knew SDP’s had moved from being a “nice-to-have” to a “have-to-have” when….
- When banks began to prototype mobile services to add to their single-dealer platforms
- When SDP’s continue to outperform multi-dealer platforms even when FX volumes are down
- When really rather clever people claim that an SDP can help enable a bank to become a top five global FX house.
- When the analysts (such as TABB Group) started covering single-dealer platforms and began to strongly recognise them as a category
- When an SDP became synonomous with many bank’s brands
- When SDP’s become best positioned to dominate global FX markets – the ratio of FX flows being executed via SDPs compared to MDPs reached 134%, compared to the lows of 114% back in Oct 2010.
- When SDP’s proved to be popular globally. They aren’t just used in the Americas and the EMEA region. According to Paul Blank’s post in March, Asian investors are starting to migrate flows to Single-Dealer Platforms for US Treasuries and Sovereign bonds.
The list really could go on!
So, laggards, what are you waiting for?
Jennifer Reid is marketing manager at Caplin Systems. You can find her on Twitter and Google+
Filed under: Jennifer Reid, Single-Dealer Platforms |
[…] Single-dealer platforms: No longer the realm of innovators & early adopters […]