Instinet has told The TRADE brokers need to embrace technological outsourcing, as western banks continue to pull back from Asia.
Asia has recently been a focus for heavy investments amongst western banks since the financial crisis. However, these banks have faced low margins and huge competition, leading to a growing number of banks pulling back from the Asia Pacific region. For example, last week Barclays confirmed it was withdrawing from several Asian countries and slimming most of its operations in the region.
Speaking to the TRADE, Joel Hurewitz, global head of broker dealer strategy at Instinet, said his firm is prepared to take advantage of this:
"Looking particularly at Asia, there are constant market structure changes that a vendor may not be on top of, but at Instinet we need to be on top of it because we're using these tools. We have been in this business since the '60s, and we are always trying to be innovative."
As this trend continues, Instinet is seeing an increase in enquiries from brokers who are looking for technological solutions to the problems they face in Asia.
Hurewitz added: "It is certainly time for brokers to embrace technology outsourcing and we absolutely should be one of the companies that brokers think about when having those conversations."
Earlier this month, BNP Paribas announced a partnership with Instinet, to outsource its Asian equities trading operation. Prior to the Chinese markets crisis of summer 2015, BNP Paribas had spoken relatively aggressively about its expansion into Asia, but it now appears to have reversed its position.
Hurewitz said: "One of the benefits of an Instinet product is that we are a broker and we understand a broker's sense of urgency. Ultimately we are using the very same solutions that we're offering to our clients."
Partnerships like the one with BNP Paribas, are a big focus for Instinet at the moment, says Hurewitz. He added: "This is a technology conversation.
“Instinet is both a product leveraged broker and an unconflicted agency broker, which allows us to do things other brokers couldn’t do. We aim to come up with creative technological solutions in partnership with our clients."