The DCM arms race few know about
There's an arms race going on in DCM and many don’t know about it. The goal is to build a DCM operating platform for everyday workflows, such as new issue pricing indications, data analysis, pitchbook creation. The benefit is to speed up processes, capture new DCM data, produce better content more generally, all of which can be weaponised to grow or protect wallet-share.
Here is a high-level summary of the main developments so far:
1. The first fully-fledged DCM operating platform appeared in 2013 via a US bank. This operating platform was successfully adopted by DCM and Syndicate and is used to this day.
2. Over the next decade at least 7 more banks have either built or are building a similar DCM platform with varying degrees of adoption success.
3. In 2020, the Bots platform becomes available, introducing a more affordable alternative to building proprietary DCM platforms. It is quickly adopted by top tier banks*.
4. By now, the majority of the largest 20 DCM houses are on their way to using dedicated platforms to process all new issue pricing indications and managing their pitch-related workflows.
* One of the banks dropped their in-house solution in favour of Bots, which it now uses globally.
Note: this excludes excel-base projects facilitating DCM workflows.
As a consequence, it’s more and more common these days, when speaking to DCM teams, for a banker in the room to say “ah yes, we had a similar system at my old shop and we entered all our pricing into a dedicated system”.
We’ve also noticed that fewer DCM teams need the value proposition of a DCM platform explained, we’re preaching to the converted. The conversation has moved on from high-level discussions to more specific topics, such as the data integrations, pathways to full adoption and, of course, features.
In fact, our demos frequently overrun, sometimes beyond 90 minutes(!), usually because at least a few bankers on the call want to compare capabilities versus another platform (if you must know, Bots usually comes out on top).
The pattern is clear and we expect that by the turn of the decade banks using email and excel for these processes will be a small minority.
Get in touch to learn more and get the latest news from the ever-evolving DCM FinTech ecosystem.