Overbond was on a roll recently with the expansion of its operations in the US multiplies bond issuance and the launch of new digital channels to increase fixed income market liquidity.
As the first end-to-end Capital Markets platform for primary bond origination and fixed income deal execution, Overbond has expanded the real-time access to the Overbond Platform to all US corporate issuers and institutional investors by extending key functionality via desktop and mobile applications for all operating systems.
Additionally, it has strengthened its presence in the US with the opening of its New York office in Grand Central Tech.
Overbond CEO Vuk Magdelinic expounded on the rationale behind the move to expand in the US in this Q&A. He also discussed the role technology and innovations have in helping Overbond in its operations.
Tell us what’s behind the move to expand your operations to all US corporate issuers and institutional investors.
The US bond market is over 40 times larger than the Canadian bond market, both by dollar amount and by amount of new issuance activity. For example, governments and corporations issued over US$7 trillion in 2016, compared to about US$160 billion in Canada. Going to the US was always part of our growth strategy since day one, but we first focused on Canada to refine our product-market fit.
Our US launch marks the beginning of the rapid expansion of our US client base and we are already working with multiple US based institutional clients.
How do technological advances like data analytics help Overbond’s operations?
One of the key features of our platform is our proprietary COBI (Corporate Bond Intelligence) algorithms, which uses machine learning to process an abundance of primary bond market data. Overbond COBI provides for more opportunities for institutional investor quotations and executable deal idea information, which is currently very fragmented and limited in access (due to the lack of a centralized information hub).
We use several data visualization and predictive analysis technologies that is layered on top of bond market data, which is directly integrated into our platform from data partners including Thomson Reuters as well as DBRS, Egan-Jones Rating Company (EJR), Moody’s and Standard & Poor’s credit ratings data.
What makes Overbond different from other players in the market?
There are many technology companies operating in the secondary bond market space (such as trading platforms and data providers), however there are very few tech companies tackling the primary bond market.
We are the first fintech entrant into the new bond issuance market with an end-to-end platform and network for primary bond origination, which now includes digital omni-channel access through our desktop and mobile apps. Our vision is to transform the process of bringing new bonds to the market, which is currently manual, inefficient and opaque.
What are some of the challenges facing your firm? How do you plan to overcome them?
Some challenges include scaling the platform to constantly innovate our COBI algorithms, which includes automating key processes. The other challenge is now scaling to include all US data sets fast enough to keep up with our US plan. Our COBI algorithms are already processing millions of data points and we have rolled out to 5000 key US issuer and investor clients. Overbond platform is easing regulatory pain that is hitting the US institutional investors in January 2018 through MiFID II and other like regulations.