Transforming sell side research with digital technologies
The implementation of the Markets in Financial Instruments Directive (MiFID) II regulation in Europe has altered the research landscape for sell-side firms. With fees un-bundled from trade execution commissions, buy-side firms have to pay separately for research services. Cost and margin pressures are compelling buy-side firms to shrink research budgets and strengthen in-house research. The rise of independent research firms is also adding to the pressure on sell-side firms.
To retain an edge in such a challenging environment, sell-side firms must reinvent equity research by ushering in innovation in sell-side research. The way forward entails offering value-differentiated research services by adopting artificial intelligence (AI) tools and digital technologies for sell-side research by: