14 Mar 03: Wachovia Pioneers RIXML-Based Tagging for Research Services

Wachovia Securities is incentivizing its buy-side clients to receive its research directly by offering to install the Research Information eXtensible Markup Language (RIXML) at customer sites. The firm has adopted RIXML as the standard for tagging its equity research.

According to Gwen Moertel, head of IT at Wachovia, direct distribution offers a number of benefits to the firm. First, it helps Wachovia better differentiate its research from others’ offering s distributed via the various research portals and aggregators. Wachovia’s research is currently available via Bloomberg, Briefing.com, CNN Money, Dow Jones Newswires, Multex, Thomson Financial’s First Call, Yahoo! Finance and Zack’s.

In addition to differentiation, direct delivery can also save the firm money in terms of fees it pays to the aggregators for distribution of its research. Research distributors typically charge both the originators of the research and the recipients of the aggregated product.

In order to tag its research using RIXML, Wachovia has implemented a new research publishing system developed by a third-party consulting firm. In addition to the benefits enable by the RIXML tagging – including more efficient searching and organization of research for clients – the system has afforded an additional positive: it has speeded up the internal publishing process.

Wachovia has been able to extend the deadline for its morning research packets to 4 a.m., from 8 p.m. the previous night. The system has allowed the firm to automate previously manual processes, such as adding estimates and tagging. As a result, room for human error is substantially reduced.

Now, the publishing system is able to publish notes as soon as they are approved by the compliance department. Additionally, adoption of the system has allowed the firm to reducing its printing by as much as two-thirds, which translates into both time and cost savings.

The adoption of RIXML has been slow-going, in part due to investments in alternative technologies and processes on the part of both the sell side and the buy side. It is expected to reach critical mass when there are sufficient sell-side firms creating RIXML-tagged research for the buy side to perceive value from the standard and implement compatible systems accordingly.