Regional investors look set to place increasing sums of money into structured products, as financial technology platforms enhance their transparency, pricing efficiency and order execution, said panellists at Hubbis' Structured Products Forum 2015 in Singapore in June.
Advances in financial technology platforms have enables structured product providers to deliver products in a far quicker, more efficient way to clients, which has helped to improve their appeal.
These platforms mean product distributors no longer need to conduct multiple conversations between relationship managers, execution desks, product providers and the clients in order to decide upon a product and the pricing that can be expected. It has also enabled the cost of such products to fall.
However, more improvements need to be made to automate technology in the middle- and back offices of buy-side and sell-side companies, so they can receive automated updates on new product developments.
The fallout of the global financial crisis on structured products forced product manufacturers and distributors to re-think the inefficiencies of the market and how to make the process of creating and executing these products a great deal simpler and less intimidating. Multi-issuer product platforms are likely to be the future for structured product creation and issuance, as they offer much more variety and competition, ultimately benefiting the end-investor.
These platforms will also let product manufacturers focus on areas in which they truly excel, while the increased automation will free up resources and time for distributors to better discuss how to meet their clients’ investment needs.
The key objective for financial technology platforms is to standardise structured product comparisons, so investors can truly compare products from multiple issuers. Additionally, banks need to better integrate the IT systems of their various financial instrument platforms, to more easily create structured product solutions.
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