Research provision hits digital inflection point
Unbundling hits European research provision as providers grapple with transparency and valuation.
Research providers must have been wondering what else could be thrown at them as they entered 2020, given the upheaval that the unbundling of execution and research has brought to their industry during the past few years.
The answer was Covid and the switch to remote delivery.
They still face the challenge of making sure they provide quality research at the right valuation, as budgets are capped, but now also have to do this with the shift to digital distribution.
Establishing a clear valuation and pricing mechanism for research provision remains a challenge for asset managers, even as they expand their consumption of different types of analysis.
The demand for research in areas such as ESG and artificial intelligence (AI) has seen an acceleration in the use of expert networks and greater discussion over what should be deemed a research expense and what should come from the market data budget.
However, for firms that can refine their proposition and target it well there are opportunities and challenges from the current remote working environment.
If there is a rotation happening, there will be a scramble for research
“Covid has brought economies in market development work,” says Mike Carrodus, chief executive of Substantive Research.