2020 Outlook: Kevin McPartland, Greenwich Associates
Kevin McPartland is Head of Market Structure and Technology Research at Greenwich Associates.
What was the highlight of 2019?
We have been talking about cutting-edge technology hitting institutional markets for years – artificial intelligence, nature language processing, big data – and in 2019 it did. It’s no longer just talk and speculation. Nor are these technologies relegated to Silicon Valley. And it’s only going to get cooler and more impactful in 2020.
What surprised you in 2019?
We’re big advocates of putting technology to work to improve bond market efficiency. It wasn’t surprising to see electronification here move forward, but it was surprising to see how much it moved forward. Nearly one-third of investment grade corporate bonds traded electronically in the final months of 2019. This is up from one-fifth in 2017 and one-quarter in 2018.
In 2020 electronification will be about more than just the final execution – something we will talk a lot more about in the coming months.
What industry trends have been prominent but are now fading (or will soon fade)?
It’s still hard to believe that both Dodd-Frank and MiFID II have moved from top priority to business as usual. Yes, both will continue to receive tweaks around the edges, and neither is perfect. But by and large the industry has accepted, adapted and moved on.
Electronification of the municipal bond market also presents a large opportunity.
The success of Northbound trading showed electronic execution is way forward for the bond market.
Algorithms have become more prevalent in the spot FX market.
Increased electronification has created useable and accessible real-time and historic trade data.
Buy-side firms can discover liquidity more efficiently and execute on Turquoise.