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The average fees to underwrite US investment-grade bond sales fell to 0.44% this year form 0.54% in 2010, while high yield debt fees fell to 1.28% from 1.7% in 2010. Bloomberg talks about how banks like Goldman are using streamlined, automated systems such as those from Ipreo to attract the greatest volume of deals to offset these lower fees.
The fact that Goldman is interested in this type of streamlining is telling. It shows there's an economic interest for big investment banks to standardize lucrative processes, even if that means that eventually they'll be less lucrative. And that is the implication. Typically, as banks use computers for classically human actions, they also end up shedding light on traditionally opaque businesses, leading to greater efficiency and lower fees. As Kevin McPartland, head of market structure and technology research at Greenwich Associates, said in a phone interview, "The more electronic any process gets, the knock-on effect is more data, which leads to more transparency."
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