The difference between asses and guinea pigs

Matthew Baxter joined Caplin as Head of UX Design in December 2012.


“When you assume, you make an ass of you and me.”

The trouble with this aphorism, apart from the fact that you should really take a long, hard look at yourself if you go around regurgitating such trite, hackneyed old twaddle on a regular basis, is it’s usually wrong.  Assumption can be trusted to save time, money and effort in almost every case, provided you are in possession of the knowledge necessary to make the right assumption.

If you perform any kind of professional consultancy, you are paid to make assumptions based on your training, experience and talent.  Assumptions are educated guesses, and we all make them all the time if we want to get things done.  Assumption based on understanding the domain, the user and their stories and the client is what we do.  Assumption without understanding is a recipe for disaster, but starting from scratch every time is obviously foolish, costly, wasteful and time-consuming.  So…. Continue reading

Research: the new driver for online trading

Here’s an interesting new trend.

The business groups in banks that drive online trading initiatives in general, and SDPs in particular, are usually the trading desks – particularly, of course, in OTC markets like rates and FX.

So it’s notable that we are currently talking to the research divisions of three tier-one banks about integrating with trading. All large banks already have extensive institutional portals offering research, trade ideas and technical analysis to their customers. What’s happening now is that the research divisions that own these are looking for ROI — they want to see a direct route from their ideas to an executed trade.

There are two reasons for this: (1) it obviously makes sense to try and capture a client’s business there and then, by providing a smooth and easy route from research into execution; and (2) the research divisions want to justify their cost by associating themselves directly with revenue.

I’ve long been preaching the message that banks need to focus on vertical integration (pre-trade, execution, post-trade) in SDPs as well as horizontal integration (cross-asset). But it’s interesting to see this being driven so strongly now from the pre-trade end rather than from the trading end.

Research and Trading converge to make SDPs ‘Stickier’

In the past, perceived wisdom had been that bank trading platforms are for trading, whilst their research portals were for in-depth research – and never the twain shall meet.

And whilst many banks pay lip service to integrating pre-trade research with execution within their trading platforms, few get round to actually doing it, and fewer still do it well.

Many banks (and certainly our clients) produce world class proprietary research, across all global markets including FX, Rates, Fixed Income, Credits, Equities, Commodities and many other markets. This research combines fundamental, technical and quantitative data and in the case of large custodial banks seeing real-time capital flows via their platforms to produce in-depth research, intuitive trading ideas, and event driven market strategies.

Typically research has been provided to institutional clients via a separate research portal, where comprehensive research and analytical tools enabled clients to customise the bank’s in-house proprietary analytics and carry out ‘what-if’ analysis as part of the pre-trade intelligence and strategy formulation process.

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