Bridging the gap: How automation is empowering Asian private banks

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In today’s increasingly complex and fragmented fixed income landscape, private banks in APAC must embrace smarter, faster, and more efficient trading strategies to meet client expectations and remain competitive. The need to harness automation on private banks’ execution desks has grown stronger amid shifting market dynamics, increased volatility, and intensified macroeconomic headwinds.

The challenge for private banks in APAC

Private banks in APAC face a unique set of challenges when trading fixed-income securities. These include:

  • Fragmented regional markets with inconsistent liquidity, market structure, and regulatory environments across countries;

  • Limited transparency around pricing data and liquidity information;

  • Inefficient manual communication channels and lack of connectivity between the fixed income execution traders, relationship managers, and end clients. Relationship managers—who play a crucial role in guiding clients’ investment decisions—often find it hard to access relevant real-time market insights from their trading desks.

Within APAC, MarketAxess has observed a gradual increase in the adoption of electronic trading and automation by fixed income desks, reflecting the region’s progress in electronic trading. Growing demand for automated processes and electronic trading solutions is also driving the momentum for continued innovation and transformation in the region’s trading workflows.

Only a few years ago, fixed income desks at private banks across APAC predominantly relied on chat and voice-based request-for-quote (RFQ) trading, with relatively low penetration of electronic trading and even lower levels of automation. Due to the heavy reliance on manual processes, traders were—and in many cases still are—forced to spend a significant amount of time handling easily executable small tickets or providing price indications to client advisors. This often comes at the expense of focusing on more complex trades where their expertise and manual intervention can make a difference and truly add value.

However, recent data from Axess IQ shows Asia is now reaching a new era of execution efficiency: As of 2024, 48% of fixed income trades in APAC were executed as “zero-touch” via Axess IQ®. However, there is still the potential to make workflows even more efficient, as seen through the momentum in Europe, where automation adoption is currently at its highest, reaching 90% on some of the private bank trading desks, creating an almost “equities-like” trading experience for end clients. As the region’s wealth ecosystem matures and client needs evolve, private banks in Asia are increasingly under pressure to find more efficient ways to trade fixed income products and streamline operations.

Navigating market volatility

To support fixed income traders in navigating volatile markets and improving trading efficiency, particularly in markets like Hong Kong and Southeast Asia, MarketAxess launched Axess IQ in 2019, a “one-stop shop” EMS-like unique execution and order workflow solution tailored specifically for the needs of private banks and wealth managers. Axess IQ enables traders to manage and monitor their open order queue, automatically assess and prioritize incoming orders, aggregate liquidity and pricing data into a unified view, and execute orders with greater ease and efficiency across the full spectrum from “high-touch” to fully automated “zero-touch” workflows.

Furthermore, Axess IQ is fully integrated with MarketAxess’ unique liquidity and suite of trading protocols including Open Trading®, connecting traders to a global community of 2,000+ potential counterparties. Through automation protocols for RFQ workflows tailored specifically for the private banking and wealth management sector, MarketAxess has seen a surge in adoption of automation.

In 2024, APAC’s Axess IQ volumes saw a 75% year-on-year increase while trading volumes for US investment grade bonds on Axess IQ rose by 109% year-on-year, and emerging markets debt saw a 78% year-on-year increase. By streamlining the workflows, Axess IQ enables private banks to respond faster to client inquiries and make better-informed decisions without relying on outdated data or manual processes.

Execution on the go

A major pain point raised by relationship managers and wealth management advisors in Asia was the lack of a mobile web app that provides access to real-time market insights, pricing and liquidity indications while on the go.

Responding to this feedback, MarketAxess developed Axess IQ Lite, a web app that runs on any device (such as tablets or laptops), making it the ideal tool for advisors and relationship managers who need to stay connected with their trading desk, whether in the office or while traveling and meeting with clients.

Axess IQ Lite provides relationship managers with direct access to live market insights like high-quality price and liquidity information for individual bonds or whole portfolios (based on CP+, MarketAxess’ award-winning AI-powered reference price) as well as real-time access to their orderbook, anytime and anywhere. The integration of Axess IQ Lite for advisors with the execution desk’s Axess IQ trading workstation also allows traders to share interactive recommendation lists with advisors and provides advisors with the option to directly submit their orders to their trading desk via Axess IQ Lite and the ability to track the execution status of their orders in real time.

Axess IQ Lite is finally eliminating the disconnect between relationship managers and their fixed income trading desk, significantly enhancing front-to-back efficiency across the advisor workflow.

The future of trading is here

Automation and data are key to the future of trading, enabling private banks to manage their clients’ fixed income portfolio with the same efficiency and precision as other asset classes. However, enhancing workflow efficiencies through automation does not eliminate the need for human expertise. A human touch is also essential for private banks to engage more meaningfully with clients.

Electronic trading platforms such as MarketAxess are at the forefront of this transition, helping private banks bridge the gap between advisory and execution. By bringing real-time data, shared recommendation lists and direct trading access to both execution desks and client advisors—ensuring they are more seamlessly connected throughout the entire fixed income journey, ultimately aiding them to better reach their clients’ investment goals.