Looking Back and Looking Forward
Phew! It’s been a hectic year and it’s ending with a frenzy. Rob and I remarked this week that this is by far the busiest run into Christmas we’ve ever had, (and that includes our time working in banking). Thankfully, the manic travel schedule for 2018 is over, and it’s been nice to be back behind my desk in London as the year draws to a close. It’s given me the opportunity to reflect on what Origin has achieved over the past 12 months and to look forward to what we have planned for 2019.
2018 was a momentous year for Origin, representing what feels like an inflection point for us. We hit major milestones across three core areas:
- Strong client growth –
We now have 17 dealers and nearly 70 issuers on board, with both constituencies nearly doubling in size over the past 12 months. More excitingly we have a very healthy pipeline, with a significant number of dealers and issuers set to join once procurement processes are complete.
- Expansion into Asia –
We welcomed our first full-time representative in Hong Kong and our first Chinese borrower onto the platform. This felt hugely significant, acting as a test bed that will be the first step along the road to Origin becoming a truly international enterprise.
- Product development –
A significant amount of work has gone into our term sheet generator, which has been rigorously tested by our customers over the past 6 months. Right now we’re putting the final touches on it and we expect to release it early in the new year.
As you can see, we’ve been very busy. But what excites me even more than our current strength is our potential, and how these achievements will act as a springboard for what’s coming next year. Obviously, we expect continued and increased client growth. But we will also see a true blossoming of our product as we build upon a very solid foundation. Here are some of the things you can expect to see:
- Asia CD Workflow Suite –
In order to service the Asia region, we’re adapting our term sheet generator for the CD market in Asia. This is a thriving, fast-growing sector, helping borrowers fund in the short end of the curve. Unlike commercial paper markets in the US and Europe, a full suite of “normal” bond documents need to be produced: term sheets, final terms, accession letters, offer confirmations and more. At present, this process is 100% manual, with no electronification. We are automating the production of that entire suite of documents, helping save countless hours for syndicate, DCM and borrowers. This is a high volume market (with some issuers doing 300+ trades a year) where documentation consumes too much of people’s time. A perfect market for us.
- Fully Digital Post-trade –
As you’ll know, we’re expanding our term sheet tool to include the production of final terms documents for MTNs. But what’s very exciting is the work we’re doing to go even further, taking the trade information we have and opening up an API in order to digitise the post-trade workflow. It’s amazing (and scary) to think that in 2018, faxes are still regularly used to communicate between dealers, issuers, IPAs, and CSDs…not to mention the litany of emails and PDFs. With parties using Origin not just to find funding levels and trade opportunities, but also to generate all the required documentation, we will become the application layer that connects all parties to a transaction (dealer, issuer, IPA, exchange, etc), eliminating the web of emails (and faxes) that currently waste time for everyone involved. And most importantly, it’s a solution that fits within the existing market structure, without trying to restructure the relationships between dealers, borrowers, investors, and the major clearinghouses.
- Beyond the MTN Desk –
Finally, we are expanding Origin’s footprint within our dealers to go beyond the MTN business. In particular, we are extending our funding targets database to help facilitate syndicate and DCM teams when they come up with new issue pricing for benchmark transactions. The current workflow is still entirely manual, with DCM requesting and receiving indicative new issue pricing from the syndicate desk via email. The information is typically sent to the issuer in a Powerpoint, and the data isn’t captured. These pricings are done regularly and can include pricing across many currencies, done by different syndicate desks around the world, for hundreds of issuers. And there’s a messy web of spreadsheets that are sticky-taped together to help manage the whole process. Just as we’ve seen on the MTN side, by structuring and capturing the workflow, this gives rise to a treasure trove of data – pricing, the new issue premium, the predicted initial price talks, the fair value in multiple currencies, best timing for a transaction, – all of which is currently lost in Outlook and Powerpoint. Given our success solving the problem for the MTN desk, we are doing the same for syndicate and DCM. If this sounds of interest, get in touch.
So as you can see, our plates are very full for next year! We are extremely proud of the strong foundation we’ve built so far, and even more excited about our pipeline. As always, we try to remain laser-focused and methodical about our growth. It’s a strategy that has paid off so far, and we expect it to continue. Ultimately, everything we do is driven by our clients and their needs, and we are very fortunate to have a (growing) population of satisfied clients who were not only willing to join us in the early days, but continue to actively support our growth with regular feedback and engagement. To all of you, a very big thank you from all of us at Origin. We can’t wait to see what 2019 brings.