Increased levels of communication and information efficiencies are the key elements to improving relationships between the buy- and sell-side, according to panellists at this year’s Fixed Income Leaders Summit US.
For buy-side firms, the volume of data and information they received from their sell-side counterparties can be overwhelming, but Steven DiVittorio, head of public fixed income at Barings Asset Management, told delegates that talking to sell-side counterparts allowed for greater mutual understanding.
“We get so much information throughout the day; runs, electronic feeds, whatever it is we are just looking for better, more efficient ways to get information from sell-side institutions quicker, easier, so we can do our jobs a lot faster and get to more important trades rather than things that you don’t necessarily need to spend a lot of time on,” he said.
Mark Betteridge, global head of fixed income and currency analytics at data giant Bloomberg, agreed with DiVittorio’s comments and reinforced that while regulatory change was a fact of life within the financial markets, natural evolution was something firms could influence.
“It’s about the buy-side telling us what they need next,” he said. “The enhancements that we release are based on feedback, direction and guidance that we receive from the buy-side.”
Betteridge also highlighted the increasingly vital role that data standardisation is playing in the flow of information and facilitating technology innovation for the betterment of both sides, as the buy-side’s “ingestion of data is reliant on standardisation” and was driving the use of automation tools on the sell-side.
Touching on the level of automated systems that banks are now adopting, George Runsak, head of global fixed income for Wells Fargo Wealth Management, welcomed the advancements in technology but also said that the relationship is still based on communication.
“I constantly hear whether the sell-side needs to be more high-tech or high-touch; do they need to leverage technology more effectively or partner more effectively, and I honestly think they need to do both,” he said. “If you look at the clients of the future, they are demanding that. That’s how we are responding.”