The gig economy has arrived in banking.
French lender Societe Generale SA announced Thursday that it had struck a deal to provide Asian equity research to its clients from online financial research syndication platform Smartkarma. According to the release:Well, at least it's not the robots.
"Societe Generale is the first global investment bank to have an agreement with an emerging fintech company to provide equity research that is compliant with evolving research unbundling requirements, such as MiFID II."If the letter soup in that sentence went above your head, here's a summary: Europe's proposed new investment regulation, the Markets in Financial Instruments Directive, will require equity research to be paid for independently, instead of bundled together with trading commissions. As they start looking into how to separate the areas, banks are finding that research can't always pay for itself, partly because of the competitive nature of the business.
Enter third-party providers, such as Smartkarma . The platform has found a niche aggregating and distributing research produced by small brokerages and, more often, by independent analysts who may use it as a venue to retain visibility and land consulting work after leaving positions at big banks or funds.
Until now, such services had been gaining subscribers but had not replaced in-house research desks. Societe Generale's announcement may indicate a bigger shakeup is coming. It makes sense under the new European rules so expect more such notices. With many jurisdictions considering emulating MiFID, it could even become the norm.
The bad news for employees is that if banks are using syndicated research, they will need fewer in-house analysts....MORE
As noted in last Sunday's "The automation of creativity: scary but inevitable":
First they came for the journalists and I did not speak out-
Because I was not a journalist.
Then they came for the ad agency creatives and I did not speak out-
Because I was not an ad agency creative. (see below)
Then they came for the financial analysts and I
said 'hang on one effin minute'....