The landscape for fixed-income solutions1 is a complex one, shaped by a variety of economic, geographic and cultural factors. This complexity is creating wide differences across different segments of the market - notably bonds, securities and loans - in three main areas: the quality of reference data available, the level of modeling, and the level of electronification and automation.
Despite these differences, however, at the heart of the fixed-income value chain is data, and it is data that is having the most profound effect on fixed- income markets. As the supply of data increases, it is helping to drive something of a ‘renaissance’ in analytical techniques, and tools such as machine learning (ML), robotic process automation (RPA) and natural language processing (NLP) are starting to find novel applications in this marketplace.
Against this background, we believe, the most dynamic area of the fixed-income landscape is securitization. Once considered all but dead, securitization has enjoyed a resurgence since the 2008 financial crisis, and we believe it is one area of the market that is likely to see considerable change in the coming years.
Furthermore, as sell-side market-making books decline, most of the demand for securitized products is coming from the buy-side, creating a large potential market in cutting-edge analytics with integrated data and simplified access.
Our analysis reveals a grouping of vendors in the category leader quadrant, reflecting among other things an investment in buy-side solutions to tap into a strong source of demand.
Vendors without a deep focus on securitization, meanwhile, have tended to gravitate toward point solutions, covering areas of the market well with more generalized offerings.
Data, of course, is central. To offer the best solutions, vendors must continue to develop their technology, by devising more sophisticated analytics and improving their solutions resistance to attacks.
This report uses Chartis’ RiskTech Quadrant® to explain the structure of the market. The RiskTech Quadrant® uses a comprehensive methodology of in-depth independent research and a clear scoring system to explain which technology solutions meet an organization’s needs. The RiskTech Quadrant® does not simply describe one technology solution as the best risk-management solution; it has a sophisticated ranking methodology to explain which solutions would be best for buyers, depending on their implementation strategies.
This report covers the leading providers of fixed- income technology solutions: Axioma, Bloomberg, Broadridge, Calypso, FactSet, Finastra, FIS, IHS Markit, Moody’s Analytics, MSCI, Murex, Numerix, RiskSpan, StatPro Revolution Delta, Thetica Systems, Vichara Technologies, and ZMFS2.
We aim to provide as comprehensive a view of the vendor landscape as possible within the context of our research. Note, however, that not all vendors we approached responded to our requests for briefings, and some declined to participate in this research.
1 Note that in this report we focus on the US fixed-income market, because it contains the most overall fixed-income activity by region.
2 Note that references to specific vendors within the text of this report do not constitute endorsements of their products by Chartis.