The digitalisation of financial services has transformed how issuers distribute products, removing friction from the process and lowering costs. Online platforms offer brokers a level of access to retail investors, which would have been hard to imagine 20 years ago.
Distributing structured products is more complex than a conventional investment like an equity due to the way the payoff works and greater regulatory scrutiny. The value of an equity either rises or falls (and in some cases it pays a dividend), whereas the payoff generated by a structured product may depend on an event such as the breach of an upside or downside barrier, which results in nonlinear exposure to the underlying asset.
To date, distributing structured products has been largely manual, involving the exchange of a high volume of emails and telephone calls between the issuer and the manufacturer of the derivative providing exposure to the underlying asset. However, Futora’s platform automates the process, saving time and money and driving additional revenue streams through new distribution channels.
The whitelabel version of Futora’s platform gives users access to the same product range as the issuer. This version can be shared internally, for example with foreign branches or individual advisors, and externally with asset managers, family offices, private banks and other institutional clients. It offers the same functionality, such as pricing and execution, and features a client portal which streamlines the lifecycle management of a structured product and provides an interface for investors to track their portfolio.
Banks can add the capability to distribute structured products to their points of sales, such as in-branch or remotely on a mobile device like a tablet. They have two options: either use the native user interface or connect Futora’s platform to existing IT systems via an application programming interface (API). The API option has proved popular with banks in the Middle East. Using this technology allows banks to embed Futora’s platform into third-party investment solutions, so they can offer structured products alongside traditional funds.
Big sellside institutions can provide a quote for a structured product within minutes. But this is practically impossible for an issuer that manually prices the derivative portion of the product with various manufacturers in order to secure the best deal for its client. By automating the price discovery process, Futora’s platform allows mid-sized commercial banks to accelerate distribution and compete with their bigger rivals.
The agility afforded by Futora’s platform is also key to delivering truly personalised investments. While some clients are happy to subscribe to an offering, others want exposure to an underlying asset of their choice. To meet their needs, issuers need to automate pricing, execution and distribution, especially if they would like to offer these products with a minimum investment as low as $10,000.
Futora also operates a marketplace. This marketplace lists products issued by all major sellside institutions globally, but any issuer can add its products and benefit from exposure to a sizable market of potential clients.
To learn how Futora streamlines the distribution of structured products, arrange a demo today.