Market intelligence
Clients often have an intuitive feeling that their risk or business practices are not in line with market practice but may not be in a position to demonstrate this with hard facts. To initiate change within an organisation, sponsors also often find it helpful to have a review of market practice drawn up by an independent third party.
A market intelligence study is an independent means of surveying market practice amongst the client’s peers and/or obtaining the views of the client’s customers or other market participants. Clients may also wish to have their practices benchmarked against the market, and for us to make recommendations for changes they should adopt in their practices to bring them into line with market practice.
An alternative reason for a client wishing to commission a market intelligence study is to put a piece of research in the public domain for their own marketing purposes.
As with all of our services, market intelligence studies are conducted by senior consultants who are subject matter experts. We believe that the ability to fully interpret interviewees’ answers and to ask pertinent supplementary questions are essential to obtaining the most from a study.
We conduct Market intelligence in a number of different ways:
- Private market intelligence – a client commissions us to perform a study for their own internal purposes. The full report is private to the client and they do not normally intend it for further publication
- Syndicated market intelligence – where we consider there are topics that are likely to be of interest to a number of clients we may conduct research amongst a group of clients. All clients in the group will receive the same report. This has the advantage for clients of being much cheaper than a piece of private market intelligence they commission for their own exclusive use
- Sponsored market intelligence - a client wishes to put a piece of market intelligence in the public domain. This may be branded in the client’s own name or branded as InteDelta but sponsored by the client. If requested, we can also assist in the distribution of the report using our large database of risk management and other relevant contacts
We have an established methodology for the conduct of market intelligence studies:
Compile questionnaire and survey group
We work interactively with the client to compile a questionnaire and the survey group of competitors, client or other market participants. As part of this process we advise the client on the types of questions where we expect and do not expect to be able to get good quality information.
Hold interviews
We approach contacts within the survey group to hold interviews. We cannot guarantee that all members of the survey group will agree to interviews, but we will advise the client of the success rate we expect. Historically, we have achieved a success rate of over 65% in obtaining interviews with selected participants.
Market intelligence studies are usually conducted on a confidential basis. The client is not identified as the sponsor and the responses given by each interviewees are not attributed to them. Interviewees may be offered a summary report of the survey as an inducement to take part, but this will be far less detailed than the version given to the sponsor.
Unlike some firms who use junior researchers to conduct market intelligence studies, our studies are conducted by experienced consultants who are able to discuss issues with the participants and obtain more colour to the answers.
Analysis and report
We provide an analysis of the key trends identified in the survey, together with any requested benchmarking and recommendations. The detailed responses to each survey question are included as an appendix. We often also hold presentations and workshops to discuss the results, and these are given by the consultant who conducted the interviews.
Client type
Investment bank and prime broker
Location
UK, US and Germany
Client need
The client had an active business with hedge funds in derivatives, securities financing and prime brokerage. It wanted to satisfy itself that its margin terms were in line with market practice. It was also planning to offer margining on a more sophisticated basis (for example VaR based margining) and wanted to know the practices adopted by its peers in this area and the changes it would need to make to implement a more sophisticated margining approach.
Our deliverables
We conducted a market intelligence survey to ascertain practices within competitor firms. We also surveyed the client’s hedge fund clients to ascertain their views on its margining levels and other aspects of its risk policy and service level.
We benchmarked the client’s current approach against its peers and recommended changes to its policies and methodologies to bring it into line with market practice. We also set out a roadmap for the implementation of more sophisticated margining methodologies.
Client type
Wholesale division of European banking group
Location
UK
Client need
The client was in the early stages of considering upgrading its credit risk systems and the methodologies used in the calculation of exposure for its derivatives portfolio. The client wished to have its practices benchmarked against its peers and to have an independent assessment of the strategic direction it should take.
Our deliverables
We conducted a market intelligence study of the bank’s peers covering the methodologies used to calculate credit exposure and the risk systems used.
We benchmarked the client’s methodologies and systems against the market and recommended a strategic direction the bank should follow. This analysis included a comprehensive assessment of the various alternative methodologies, and sample portfolios were analysed under the alternative methodologies.