Intellibonds featured in CFA Society online
12 January 2021
Intellibonds’ article on fixed income asset managers has been published on the CFA Society UK online.
Igor Tesinsky, Co-Founder and CEO, and Fabrizio Palmucci, Advisor, together have authored the piece which explores three ingredients for fixed income asset managers that they believe will be part of the digital transformation.
“We believe we’re at the start of the 4th Industrial Revolution where Artificial Intelligence (AI), Machine Learning (ML) and Robotic Process Automation (RPA) are becoming instrumental components of an investment professional’s workflow.”– IGOR TESINSKY, CO-FOUNDER AND CEO, INTELLIBONDS
The three ingredients include:
1. Access to and making sense of structured and consolidated or unstructured and fragmented data – There are obstacles to using adequate data as you need to subscribe to multiple data vendors and standardise the format, which is a costly and complex process. Therefore, the ability to turn fragmented and unstructured data into risk recommendations or trading ideas requires significant time, experience, resources or automation.
2. Successfully combining technology with fixed income expertise – Finding in-house technical expertise is challenging and hiring technical specialists who are not familiar with the fixed income business is equally challenging. Ideally, fixed income professionals will obtain their second training in programming and vice versa. The most common pattern is when a quantitative research/development team hires new data scientists, or Python/R retrained quants. This model can have some success but it often depends on whether the fixed income team embraces technology.
3. Commitment of the executive leadership team – Due to a lack of strategic direction and commitment to innovation at the executive level, many great ideas get lost or end up being pushed aside due to internal politics. As a result, top talent is leaving organisations and opting for an entrepreneurial journey. However, some examples where out-of-the-box thinking in the asset management industry has been thriving. For instance, through the creation of intrapreneurial departments that nurture internal innovation or open innovation platforms via venture arms.