As bond e-trading takes off, debt sales business may be ripe for automation

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With banks' bond trading desks increasingly going electronic, another of th...

LONDON - With banks’ bond trading desks increasingly going electronic, another of the last bastions of old-school banking - the business of helping companies and countries raise capital - may be about to succumb to the tide of technology.

Such start-ups are touting a one-stop-shop digital platform that will automate the generation and tracking of deal-related data. It will end manual processing through artificial intelligence, blockchain and “smart tech”. Some even hope to use their technology to connect smaller borrowers with investors directly, eventually cutting out middlemen banks altogether.

The sheer volume of analysis and the number of parties involved - from banks to law firms to investors - also make it harder to reduce primary dealership business to spreadsheets. Planning deals can take months of delicate negotiations between bank, borrower and end investor.Banks’ resistance to change may be overcome by the squeeze on profitability, however.

Daniel Fletcher, partner in the International Capital Markets team of Allen & Overy said the primary dealing process could be automated from end-to-end for greater efficiency. Improving the process may also prove crucial at a time when developed governments are preparing to issue more debt to fund infrastructure in a bid to boost growth.

 

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