Vela, in association with The Realization Group, has released a Financial Markets Insights report that looks at how banks are responding to increased competition from non-bank Fixed Income liquidity providers, and the role that technology plays in this fast-changing landscape.
Featuring insights from industry leaders at Vela, Bank of America, UBS and Citihub, the report investigates the challenges that banks are facing in this increasingly competitive part of the industry, and how they are utilising technology and new business models to overcome them.
What you’ll learn in this Fixed Income report
Since the financial crisis, capital requirements and liquidity ratios have been causing banks’ balance sheets to shrink, putting pressure on the traditional broker-dealer model where banks were the market makers in the Fixed Income space. This role has been increasingly filled by new non-bank liquidity providers (LPs), whose use of technology and automation provided an edge in liquidity provision, particularly for more liquid names. In order to compete, banks are having to change their approach, adopting a “build and buy” model, deploying best-of-breed solutions that are functionally rich, cost-effective, agile and scaleable enough to keep them competitive now and in the future.
Here are some key themes that this Fixed Income report explores:
- Liquidity fragmentation in the Fixed income (FI) markets
- The growth of the non-bank LP
- Streaming liquidity
- FI workflow automation
- Trading protocols & data transparency
- Market-making automation
- The advantage of the balance sheet
- Direct client connectivity
- The build-and-buy approach
Who is this report for?
If you’re a Head of Trading, Head of Trading Technology or Head of Fixed Income at a bank, broker-dealer or non-bank LP, this industry report will give you a greater understanding of the current challenges and opportunities presented by the increased electronification of the Fixed Income markets, and some of the best practices that can be taken to address the challenges and capitalise on the opportunities. The report will also provide great insights for any Financial Services trading professional.
Contributors to the report:
- Ahmed Heikal, Product Manager for Execution Products and Services at Vela
- Sonali Theisen, Head of Fixed Income Market Structure and E-Trading at Bank of America Merrill Lynch
- Bob Mudhar, Partner at Citihub Consulting
- Simon Linwood, Executive Director, UBS Bond Port EMEA at UBS