The resilience of ‘low touch’
Tricumen today publishes an analysis of the European cash equities market looking at the use of ‘high touch’ vrs ‘low touch’ and the impact of ‘low touch’ on the cost income ratio of cash equity trading units:
- We see no evidence of European investors shifting away from low to high touch equity trading, even in times of elevated volatility.
- We expect low-touch will gain market share in the coming years, albeit at slower pace and only as a part of the wider trading package. This will be driven by new products …
- … and inherent cost advantages over the voice-brokered model. At one extreme, ‘our’ banks which derive at least 55% of their cash equity revenue in Europe from electronic trading achieve cost/income ratio of 65%, or better .