Learning in Finance

The world of finance is getting more complicated. More specifically, the fixed income market as the largest capital market in the world is expanding in its complexity and importance. There are over 40 different professional designations available to capital market professionals, from chartered financial analyst (CFA), certified public accountant (CPA) to certified fraud examiner (CFE) to certified public finance officer (CPFO). Since 1993, the number of CFA candidates has increased tenfold, and as a result, the test itself is unrecognizable a far-cry from the 1963 test, which was 90 minutes long and had only four questions. Today, the test is a six-hour marathon designed to challenge the mettle of any future CFA. In 2013, the average candidate studied for 307 hours for their exam — and only 43 per cent of those candidates were able to pass the test. It is clear that over the past three decades, world of finance has become increasingly complex and knowledge base required of financial professionals has increased exponentially. This trend, to be sure, shows no signs of letting up.

Nor is the market easy to understand, even from the inside. “Corporate securities filings are plagued by some of the world’s most impenetrable prose, but it isn’t for lack of effort,” writes Theo Francis, reporting for the Wall Street Journal. In 1999 the SEC, acknowledging that those working in the market tended to obfuscate clarity for the sake of complexity, published a writing and style guide called “A Guide to Plain English,” designed to urge financial professionals to communicate financial information in understandable terms. “For more than forty years, I’ve studied the documents that public companies file,” wrote Warren Buffet, in the guide’s preface. “Too often, I’ve been unable to decipher just what is being said or, worse yet, had to conclude that nothing was being said.”

Taken together, this paints the picture of a market that is difficult to fully understand, and even harder to master. What becomes necessary, then, are resources that are able to support both newcomers to the industry and veterans — both of whom are likely, given the industry’s complexity, to need informational support.

Overbond developed its Support Framework to provide an easily accessible, centralized source of information to contribute towards knowledge sharing and collaboration in the capital markets. The support framework provides tools that assist in three key ways: (i) Overbond Academy, a tool designed to teach the fundamentals of bond security mechanics and act as a collaborative fixed income learning centre; (ii) Overbond Advanced Analytics, which provides advanced data visualization tools and real-time data feeds; and (iii) Overbond Bond Issuers and Investors Directory, which allows for better access to, and understanding of, the fixed income investor base, allowing for enhanced collaboration and networking amongst market participants.

The Support Framework matters because the strength of the fixed income market lies in the robust networks within it. Overbond Hackathon this past June empirically proved that a network that enables faster, more direct communication is more efficient and beneficial for all parties. Platforms that enable information flow, knowledge and confidence building and overall navigation within the complex market are increasingly valuable: between 2010 and 2013, Investopedia.com for example nearly doubled in value, from $42 million to $80 million. Overbond investor directory provides a centralized resource that allows market participants to connect and network with one another — a resource that allows for easier collaboration and for fixed income professionals to understand and navigate the complex world with increased ease and efficiency.

As the fixed income market, and the financial world at large, changes more quickly with each year, support systems are an invaluable resource to facilitate growth and advancement. The kind of sustained innovation that promises to bring the fixed income market into the digital age is made possible through collaboration and sharing of knowledge that focus on education and connectivity to allow the market to modernize, innovate, and strengthen itself in a digital age.


About Vuk Magdelinic:

Before founding Overbond, Vuk’s career spans over 10 years in capital markets and technology. As PwC Risk and Regulatory consulting manager Vuk led large digital transformation programs at Deutsche Bank and BNY Mellon in New York City. Prior to that he worked at CIBC Fixed Income trading floor in Toronto in structured products origination capacity. Vuk has collaborated on numerous publications addressing key trends in fintech innovation. Vuk holds electrical engineering degree from University of Toronto, MBA from Ivey school of business and is an avid abstract painter.