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How to design a Single Dealer Portal. And how not to.

At Caplin, we’ve helped many banks create single-dealer trading portals, and we’ve watched lots of others do so. In the process, we’ve noticed that some banks plan their portals in a way that virtually guarantees success, while others take an approach that seems doomed to disappointment. A clear pattern has emerged.

So what’s the right way – and the wrong way – to design a single-dealer portal?

First, the approach that typically leads to failure: here’s how not to plan an SDP. Tell yourself: “Some of my clients seem to want to trade directly with us online. And lots of other banks seem to be offering this. So we’d better put something together.” Then say: “I’m not sure exactly which clients will be using it, or exactly what they want, so we’ll just copy the Bloomberg screen.” (Or your internal system, or a competitor’s offering.)

Focus on delivering the minimum necessary to make it usable, so you can get it out of the door quickly and cheaply. And maybe add some miscellaneous content and eye-candy to dress it up. Then roll it out and see if anyone uses it.

Remember to keep your fingers crossed. It might help.

The smart banks are different. They think like this. “We really want to get everyone we can to trade with us direct online, because if we do it right it will be more profitable than either voice trading or multi-dealer platforms, give us a powerful personalised channel to our clients, increase flow, and allow us to cross-sell. What unique things can we offer that will lure clients irresistably to our SDP, and how do we lock them in when they get there?”

Full-service SDPs are crucial to the future of ecommerce, and the winners and losers are being decided now.

Some clients will never trade on an SDP, of course, because they need multiple quotes for internal or regulatory compliance. But a great many will – particularly smaller banks, and some wealth managers and hedge funds. First, however, you need to offer them compelling capabilities that they really want and that are not available on other platforms.

Think about it. Then go and talk to your clients.

It turns out that there are lots of features that you can add to an SDP that draw users in and keep them there. I’m not going to discuss them here, because most of them are confidential and represent major commercial advantage to one or more of our customers. But they are not that hard to figure out if you know your market and talk to your end users. Virtually every dealer has something that it can offer that users want and can't currently get other than by voice.

So if you’re building an SDP, make sure it does something that your clients really want, and that they can’t get at the moment.

Simple, really.


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