Tier 2 banks investing in single-dealer platforms, says new report from Lepus

A new research report, sponsored by Caplin and conducted independently by Lepus, investigates trends in eCommerce, and comes to some interesting conclusions.

At Caplin’s instigation, Lepus, provider of specialist consulting and research services to the financial industry, conducted a survey during late 2010 to investigate trends and opinions in eCommerce among investment banks. 30 firms, based around the world, were questioned, and the statistical data were supplemented by a series of in-depth, one-on-one interviews.

The survey results suggest that there is a global trend away from multi-dealer platforms towards single-dealer platforms (SDPs), and that this is most pronounced in FX, where half of the firms surveyed now execute more than 40% of FX trade volumes on single-dealer platforms.

The trend towards SDPs is strongest in Tier 2 banks, where a large proportion is investing in bringing SDPs to market. Tier 1 banks, in contrast, seem largely happy with their current single-dealer offerings. Respondents gave a variety of reasons for the move, but most of them are seeking to improve their client service to enable them to be more competitive and to differentiate themselves from other firms in the space.