To provide the value-added services that the buy side is looking for, a platform would have to be developed that provided enhanced price discovery, direct anonymous trade execution, and the ability for buy side firms to be able to both list an offer and hit an existing bid. It would also require multiple dealers to provide systemic liquidity. In other words, for an electronic fixed-income market to become a truly ubiquitous market, there would need to be a virtual bond exchange. This has not been the type of system that the traditional bond dealers have encouraged. While electronic bond trading will not transform the fixed-income market overnight, there are other technologies being developed that will have a very large impact on this market.
Technology develops in stages.
From '85 to '95 we were trader-centric, investing dollars to enable traders to better spot opportunities. The mid '90s technology focused on the salesperson, providing them with better client management tools. While providing technology and information to your clients is important, supporting this content delivery with traditional institutional relationships is critical. To electronically leverage firms' sales forces, firms will monitor electronic client activity and provide feedback to their representative. This electronic feedback will be used to help the sales force to better understand clients' needs and provide better, more targeted service.