Exploring Perspectives on Fintech in DCM with Daniel Shore

Q. Daniel, thank you for your time today. To kick this off, could you share some information about your background?

I worked in banking for 35 years having graduated in Economics. I spent five years in programming / analytical roles followed by 10 years in derivatives risk management at CSFP and then DCM for the last 20 years. I spent time in equity linked, corporate DCM and then FIG DCM running the European businesses for HSBC and then Mizuho. I personally advised clients in the UK/Ireland, Scandinavia and Greece/Cyprus.

Q. As a DCM banker, what would you say were the main challenges in your day to day business?

There are too many to list! But a few key ones were:
* 30+ banks all trying to out think you and a lot using non-DCM relationships to try and persuade clients to give mandates. What did this mean? Well, you needed to be smart, informative and client focused to get clients attention to win business

* Trying to differentiate yourselves from the competition by identifying key data analytics and market intelligence that clients will find useful in making decisions around funding (including secured), capital, liability management and investor relations work

* Being faced by not always having deal data on recent deals which then puts you at a disadvantage to those banks that have been leading recent deals in the market.

Q. To unpack this further, how did technology help you stay on top of your business back then?

It sounds like I am from the dark ages ! But it involved a lot of hard work analysing all the information we could gather from sales, trading, syndicate and deals we had completed. From talking to some current successful DCM origination executives, this hasn’t changed. What has changed is the need to access and analyse this information even more quickly to stay ahead (or even just to keep up) with the competition.

We used excel, powerpoint and word so it wasn’t rocket science but was very time consuming. The people who had to sift through the data sometimes found it quite onerous.

You needed to ensure you allowed yourself time to develop better strategies, insights and spend more time talking to clients. Without technology we never had enough time to do what we needed and even with it struggled as it was very time consuming.

Q. Could you share some instances where generating timely analytics helped with deals in the past? What kind of analytics were most effective?

We would take any data we had from similar rated clients to analyse their spreads and investors to see if it could highlight anomalies and areas to focus on to try and improve their spreads. We did this on numerous occasions to generate targeted investor marketing, which proved very helpful when we launched a deal bringing in extra demand driving the deal spread and then supporting secondary performance.

Also, breaking down a client’s deals vs its peers in terms of distribution across investor types as well as countries. This used to be a very time consuming task but helped in building discussions with clients about funding strategy and ultimately winning mandates.

Using the analytics to identify when we felt Issuers may have better execution metrics to launch a deal.

There are many more examples and most of them are still relevant today.

Q. How would current technology help you establish a better relationship with your clients driving more business?

If I had been able to weave DealPro into research and analytics demands of my job it would have transformed both the speed of delivery and allowed us to provide informative analysis for clients both for new issues, secondary performance and investor marketing. It would mean we could also look at much more in a shorter time frame and with comfort that the data integrity was 100%.

This would mean we could then dig deeper and more widely to build on our work for the clients. It would also mean that a lot of the time consuming and mundane work would be done by the technology (DealPro) allowing more of the team to get involved in strategy and developing closer relationships with more clients. More competitive on every level!

Q. Moving forward, looking into your crystal ball, how is technology going to impact origination?

Technology is already greatly impacting origination. Without efficiency and technology teams will fall behind versus their competition as it’s such a competitive environment. We have seen in the past how quickly you can lose league table position and revenues which can have knock on effects to other areas of a markets business.

Technology will mean that teams will be more efficient, faster, leaner and provide more interesting information and analytics for both clients, trading, sales and syndicate.

Technology will also allow Banks that are not so high in the league table to look smarter and operate without having to build big teams. This will support a growth initiative in the business.

Technology doesn’t differentiate between client types so you will be able to apply it across Corporate, FIG and SSAs.

Being able to guide a client through lots of interesting analytics relevant to their business on a laptop, mobile phone and in presentations will be driven and underpinned by high quality, reliable technology.

Q. In your opinion, what is the impact of DealPro’s financial technology solutions on a DCM team and its business?

We are already seeing it with the clients who are using as well as trialling DealPro – they are amazed at how it makes the data 100% reliable for them all the time, frees up a lot of time for them, enables them to identify better analytics and produce high quality information and strategies for clients across all client types.

DealPro is also allowing anyone in the team or at the client to be able to review and use the analytics without having to rely on others to do work on it and it’s very fast !

It is not just DCM it benefits as it also has a positive impact for other areas of the Bank (subject to compliance and data controls of course!). It will also benefit management reporting and business strategy.

This allows businesses to grow, remain lean and also stave off competition by dealing with all the areas I have discussed earlier on.

Daniel many thanks for your time today.