As one example of a broader transformation, London-based Responsive Labs, which specializes in research distribution applications, is ditching its research distribution service, Research Central, in order to focus on the increasing demand for its HTML5 conversion engine.
Shutting Down Research Central
Responsive Labs plans to retire Research Central which distributes research to mobile phones and currently offers over 1 million research papers from 512 law & accounting firms and investment research providers. The firm is in discussion with research aggregation platforms which do not yet have mobile phone dissemination capabilities, according to founder Kevin De Baere.
The move is prompted by strong demand for Responsive Labs’ engine which converts Microsoft Word documents into HTML5. The engine can be accessed through the web or an API, meaning that there are few changes to the analyst workflow. However, Responsive Labs handles the integration which can take six to eight weeks for each client.
Growing Demand for HTML5
The larger investment banks began switching from PDF to HTML5 in 2016, led by Citigroup which was the first to shut off PDF report distribution to market data vendors, requiring all report access to be hosted on Citi’s servers. RIXML, an industry-wide standard for tagging investment research in XML, also has worked on developing componentization standards reflecting the advent of HTML5. Now MiFID II is making HTML5 dissemination de rigueur for all research providers.
There are a few key reasons for the growing importance of HTML5. Using HTML5 requires authentication, providing better control over research distribution. Since MiFID II requires that asset managers only receive research for which they have contracted, HTML5 reduces the risk of inducement. Also, HTML5 facilitates research consumption on servers hosted by the research provider, allowing the research provider to measure engagement. The resulting interactions data is valuable both to the research provider and to the buy-side clients, which often use the data as part of their valuation process. Finally, HTML5 allows dynamic content such as interactive graphics or real-time market data to be embedded in the research improving its usability.
Research Transformation
Research providers have long suffered from sparse feedback from clients, but this is changing with the interactions data being generated with the help of HTML5.
De Baere cites the example of a client whose flagship research product was a monthly report consisting of 17 pages of commentary with a data table on page 18. “Once they moved to HTML5 using our technology, we were able to show them ‘dwell time analytics’ (how long do readers spend reading each component of the report)”, wrote De Baere in an email to Integrity. “The advanced analytics showed that most readers ignored the commentary on pages 1-17 and scrolled straight to page 18 to see the table.” Consequently, the research provider dumped the seventeen pages of commentary in favor of a few bullet points, freeing analytic capacity for other pursuits.
De Baere founded Responsive Labs in 2013 to facilitate mobile distribution of research. His background was as a fixed income analyst at S&P and a credit derivatives analyst at Deutsche Bank followed by a buy-side stint. Throughout his career he found PDF consumption on his mobile a pain, and this was the catalyst for starting the company. The HTML5 conversion engine was originally a means to end, namely Research Central, but clients increasingly focused on HTML5, hence the decision to pivot the firm’s focus.
Our Take
Research dissemination is going through a radical transformation, especially in Europe where the research firehose is officially dead. Responsive Labs’ move is emblematic of the shifting environment, as written research becomes more controlled, responsive and measured.