Harris Nesbitt Cuts the Risk in CRM

Harris Nesbitt Corp., the U.S. institutional equity arm of Canadian broker-dealer Nesbitt Burns, is deploying a new customer relationship management (CRM) solution focused on the institutional equity brokerage market. The firm selected iStarWorkstation 1.0 for Institutional Equities from NSIGHT Enterprise Software, a two-year-old start-up.

Currently, 150 research analysts, sales traders and traders are using the CRM system on Harris Nesbitt's New York trading floor. The firm expects 300 desktops to be rolled out by the end of the summer; by September, it plans to roll out the solution globally to international groups.

Despite the lack of CRM tools that meet the needs of capital markets firms, Harris Nesbitt believes it has found a suitable solution. "No one has built anything for our business," comments Trent Gavazzi, managing director and head of technology at Harris Nesbitt in New York, which is part of BMO (Bank of Montreal) Financial Group.

Wall Street CIOs are painfully aware of the horror stories of installing generic enterprisewide CRM solutions. I had concerns pitching the contact management system because of historical problems [with CRM systems]," says Gavazzi. "Despite the risk of going to a smaller company, there was so much upside going with a company focusing on institutional brokerage vs. plain vanilla CRM, " he adds.

The new Wall Street-oriented CRM system is the brainchild of Neil Hyman, a former head of equities technology at Morgan Stanley who most recently ran equities technology until 2002 at S.G. Cowen, where he developed a proprietary CRM system that was highly specialized for institutional workflows.

"There is plenty of CRM on Wall Street that required millions [of dollars] to install" and has low adoption rates, says Hyman, president and CEO of NSIGHT, who founded the company in 2003. "The vision of the company is to be a brokerage in a box that covers the workflow of research analysts and sales and trading," he says. "It brings all the constituents together, so there's information flow and it results in trades."

Written in Microsoft .NET, the system's back end is Microsoft SQL server; the front end is a regular client. "We felt the Web-based form factor did not fit," explains Hyman,

As a sign of the solution's success, Gavazzi relates that traders are using iStar, which usually means, "The cash register must be ringing," he says. Gavazzi notes that the firm's initial projection is a 5 percent increase in commission revenues.

The firm's research analysts, sales traders and traders previously stored their contact information in databases such as Outlook, Act and Filemaker Pro. "We've taken all the data out of that and converted it into iStar," says Gavazzi.

To avoid past CRM disasters, all of Nesbitt Burns customer contact data, trading history, commission history and institutional holdings data has been integrated into the NSIGHT system. Harris Nesbitt is in the process of integrating iStar with its order management system, Royal Blue Fidessa. "IStar will read the active orders out of our OMS and immediately generate a call list based on holdings within that person's account list," says Gavazzi.

The CRM system also has integrated industry data from StreetSight, so that all the standard names of the institutions, names of buy-side portfolio managers and traders, phone numbers and office locations are populated by default. "As far as keeping reference data clean, it's a huge leap for us," says Gavazzi. Harris Nesbitt also is bringing in institutional holdings from a third party so that a sales trader or trader can see any holdings, trades, commissions or actions the firm has had with the customer.

A sales trader also can use the solution's calendar to schedule events, conferences and one-on-one meetings with management.

With all the pressure on brokers to prove their value to institutions, the system provides a year-end snapshot of all the research the firm provided to institutional clients, as well as how many trades were conducted and how many calls were placed to the client. Then the broker can see if the firm has been appropriately compensated.

"The fact that that's integrated with our systems is just a home run for us," says Gavazzi, who notes that the system is meant to help the firm understand its clients and provide information to them. For example, a trader can walk out of a morning meeting and click on the stocks discussed that day at the meeting, then hit "power search" and see every holding for those stocks by account lists.

Though Harris Nesbitt is the first client to use the system, Hyman says 90 percent to 97 percent of the functionality can be replicated across companies, and he is in discussions with other sell-side prospects. "We want to position ourselves with CIOs," he says. "We want to take that problem off their hands," adds Hyman. "We can take some of the risk out of it." Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio