Help crowdsource research on Securities Lending innovation and get profiled on Daily Fintech


#1

Securities Lending is one part of Wholesale Banking. It is a relatively obscure part that market - not that many people understand it. However it is a) a profitable line of business (8% ROE at big banks as per research presented by Deloitte at SIBOS) b) a fragmented market with no clear intermediary (i.e ripe for disruption).

Securities Lending 101
A trader wants to short a stock. First they have to borrow that stock from another trader who owns that stock.
The stock owner lends it for an interest rate.

Once the short position is closed, the stock owner gets the stock back plus interest.

That is a potentially good fixed income asset - short duration and self liquidating.

Questions:

  • any startups getting any traction in this space?

  • What are the pain points for the stock borrower and stock lender?

  • How do the stock borrower and stock lender connect today? One way is via online brokers. How else?

  • What are the obstacles to innovation? Are they showstoppers or a to do list generator for an entrepreneur?


Cash is piling up; Which places could it go?