Back to the future for IBOR

The complexity of the investment management industry is growing and the data that needs to be analysed is richer than ever before. This is a consequence of the thinning geographical boundaries within portfolios and the search for alpha that drives managers to incorporate different and more esoteric asset classes within a single portfolio.

The impact of this changing environment has been a resurgence in the industry's use of the Investment Book of Record (IBOR), a central and comprehensive source that tells the complete story of a firm's portfolio activity. An IBOR provides a timely view of a firm's exposures, portfolio positions and cash. The fullness and clarity of the picture it paints means that it provides the intelligence and insights on which many portfolio decisions are made.

Key to the highway: The changing face of high and low touch execution

In the beginning, there was high touch where brokers provided a high-value, solution-based approach to finding the liquidity their buy-side clients were looking for. This worked in an era of high fees and low scrutiny of what end investor trading commissions were actually funding. But as markets electronified, and buy-side operations tooled up, a new paradigm was born, low touch. This reflected the buy-side's growing desire for cheaper execution, especially for trades that weren’t that hard to execute, and it also offered a path that minimised information leakage.

The result? Two routes to market with very different price tags. The problem was that brokers had to duplicate their trading infrastructure despite receiving fewer net commission dollars. This spawned the short-lived concept of mid touch which offered the worst of both worlds: junior sales traders with neither the experience nor the expertise to manage either. And so the industry muddled along ignoring the operational overhead of running two technology stacks.

Optimal cash management: seeing the wider business benefits

When optimising cash management, it’s easy to get caught up in treasury-specific goals and advantages, such as improved visibility, accessibility and control. But revamping the way the company manages its cash has many benefits for C-suite decision-makers and the wider business too.

Today’s international business environment is characterised by uncertainty. Europe’s future is being called into question and market volatility is understandably high. As a result, treasurers, CFOs and CEOs alike are looking for ways to better manage turbulence, complexity, and minimise the impact of ‘unknowns’. Naturally they want greater certainty around corporate and financial strategy, and are seeking improved control of financial risks. Moreover, they want to bolster investor confidence, increase profitability, strengthen the balance sheet and ultimately make the right decisions for the company’s future.

One of the most practical ways that treasury can help deliver on these needs is by optimising the company’s cash management. After all, the benefits of improving visibility, accessibility and control over group-wide cash are by no means limited to the treasury function.

Robo-advisors – as revolutionary as they seem?

The rise of the robo-advisor has been well documented over the past year or so. The FCA recently announced an Advice Unit that helps firms develop robo-advisor models, and RBS has also publicised that they will be sacking hundreds of face-to-face advisors in favour of robots.

Armed by what appears to be a cheaper, more accessible service, the likes of Nutmeg and Wealthfront have not been shy in their promotion of being at the forefront of opening up obtainable investment opportunities to a wider audience.

Rationalising Global Connections to Drive Costs Down, Visibility Up

Over the past fifteen years, investment banks have seen a massive expansion in global connectivity, encompassing hundreds of links to exchanges and buy side clients as well as infrastructure to backup sites.

This complex connectivity infrastructure is business critical, delivering reliable resiliency, but is also very expensive, from hardware to leased lines and exchange memberships. There is, without doubt, both significant duplication and under-utilisation of these key resources.

Sibos 2014: what to expect in Boston

With one month to go until thousands of delegates converge on Boston for the annual Sibos event, we give you the run-down on what trends and topics to expect during the conference.