NEW YORK (Reuters) – JPMorgan Chase & Co has partnered with data analytics start-up Mosaic Smart Data to help its fixed-income sales and trading business become more profitable.
The bank, whose fixed-income trading revenue slumped last quarter, has signed a multi-year deal to use Mosaic Smart Data’s technology division globally, the companies said in a joint statement released on Sunday.
The London-based start-up has developed technology that aggregates and analyzes vast amounts of data from the fixed-income trading division of investment banks to help them make more informed decisions and gain a competitive edge.
That includes helping traders decide which clients to focus on in a given day or enabling management to assess which trader, or trading desk has been performing better.
The partnership underscores the growing demand by banks for technology that can help them gain greater insight from the large quantity of data they produce and store.
“One of the key things the banks are starting to realize is that some of their biggest competitive advantages are locked within their data,” said Matthew Hodgson, Mosaic Smart Data’s founder and chief executive.
Banks are seeking solutions to deal with a liquidity crunch in fixed-income markets. Stricter capital requirements imposed after the 2008 financial crisis have made it more expensive for banks to act as market makers in corporate bonds, leading their fixed-income divisions to slump.
JP Morgan’s fixed-income markets revenue fell 27 percent in the three months ended in September, compared with the same period last year.
Troy Rohrbaugh, global head of macro at JPMorgan, said in a statement that Mosaic Smart Data’s technology could make the bank’s teams “quickly make better informed decisions.”
Mosaic Smart Data is the first company to complete JPMorgan’s “In-Residence” program for fintech start-ups, which was launched in 2016. The program gives young fintech companies support in helping commercialize their products and services.
Hodgson said the idea for the company came from his own experience heading trading at large banks.
“The problem banks face is how do you run your business and understand everything in real time, whether it is research or inventory, and be able to anticipate rather than react to client needs,” he said.
Reporting by Anna Irrera; Editing by Peter Cooney