Interesting news just out that UBS is to outsource part of their fixed income technology infrastructure to Murex for booking trades and running valuations and to ION for market connectivity gateways and pricing tools.
This decision seems a direct consequence of the increasing costs of in-house development and ongoing support and enhancement of numerous legacy platforms, and the regulatory pressure and higher capital costs that banks are facing, and that has resulted in many banks including UBS retreating from capital-intensive (inventory based) markets like fixed income where they lack the scale needed to compete with the very top tier global banks.
Whilst UBS has already stated that they are pulling back from Fixed Income, I would not expect them to make any similar moves in FX, where they are a major force.
Currently UBS is ranked #4 (behind #1 Deutsche, #2 Citi and #3 Barclays) according to latest EuroMoney 2013 FX survey. Although, their market share has fallen steadily from 14.85% in 2007 to 10.1% in 2013 (a 5% fall over that period).
Filed under: Paul Blank, Regulation, Web trading technology |
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Not clear what they mean by ‘outsource’ as a purchase of Murex is equivalent to outsourcing software development and support.