NEW RESEARCH - Building Utilities in Financial Markets

There is a lot happening in the Financial Markets sector, as market participants come to terms with higher costs of regulation and of doing business, together with lower commissions and narrower spreads. This environment is creating a new set of challenges for these market players, and for the SITS supplier community.

In the status quo, multiple companies in the Financial Markets business each spend large amounts of money to carry out mundane tasks which confer no competitive advantage whatsoever. Logic and commercial reasoning dictate that this work can be carried out more cost-effectively and efficiently by a separate organisation, working on behalf of numerous organisations – a market utility.

This report looks at the wider issue and examines how two companies, Fidessa and CSC, are building utility models to serve this opportunity. Fidessa is growing organically, broadening its service offering and aiming to recruit more and bigger customers. CSC has chosen to accelerate its move by a significant acquisition, which brings new skills and customer base, as well as providing new opportunities to leverage the company’s existing portfolio.

This examination of the different strategies of these two major players and the key requirements for success in providing market utilities should prove informative to those suppliers who may be, and in our view should be, considering similar moves.

“Building Utilities in Financial Markets” is available to FinancialServicesViews subscribers, here.

Posted by Peter Roe at '09:58' - Tagged: trading   markettrends   financialservices   infrastructure   utilities