What areas do you think are ripe for development at the moment?
From a broker perspective, one area is how you can improve the trading lifecycle by introducing new digital systems to take away up to 90% of the standard trades and leave the conversations to that 10% where you really do want to speak to somebody. Lots of brokers are looking at how they can do that without losing the personal touch.
At the post-trade stage, there’s a huge amount that can be done with new types of digital services so it’s easy to find out your exposure and your current positions as well as the whole collateral management process: how much collateral you’ve deposited, and what’s still available for you to use.
Access to information is a common theme, so you can make more informed decisions without always having to ring somebody up. Exchanges can serve their members better with faster access to information. The issuers as well could benefit from seeing real time data and analytics and understand what’s happening on a day-to-day basis. Similarly for clearing houses, when it comes to their risk management processes.
What’s demand like from customers for these solutions across the market?
We’re seeing a huge revolution broadly in FinTech that allows us to do a lot of financial activities from the comfort of our smartphones. As time goes on, you will start seeing more people questioning, “why can’t I do something similar in my job? Why are we still using old technologies?” Many brokers and exchanges realise that they need to go in that direction in the long term, particularly the smaller brokers.
How can firms strike a balance between that new technology and maintaining existing customer relationships?
Some people might look at self-service in a slightly negative way. Self-checkout machines in supermarkets are great…when they work! But if done right, a business can free up the time of their sales and support people to deal with more interesting issues and conversations and deepening relationships.
For example, you can create a system to track your orders and make visible which trader is looking at them in real-time. If you want to talk to that individual, then you can ring them up so you can actually blend it to create a digital system that’s automated 90% of the time.
How can firms go about delivering these improvements?
The first thing is make sure that they can access all of this data and that’s often a bottleneck we come across. They need to extract all this data in a way that technically something can be done with it. The next thing is building the system and that’s where a good software partner comes in handy; making sure you have people who understand the business, the broader financial markets and the technology, as well as having the capacity to test these systems.
It’s useful to have a partner who can hold your hand and guide you through this process. We also mustn’t forget the staff at the business who are going to be using this new system so making sure the right training is in place.
What kind of new technologies are helping?
There’s a lot of discussion and progress around AI. At the end of the day, it’s really about running creative new algorithms on this data to extract useful information, useful insights about your trading activity, whether it’s uncovering trading opportunities or highlighting market trends.
A lot of our clients are now trying to move their systems to the cloud. New solutions that we’re building are often in the cloud from the very start now and the key advantage there is they can bring things to market a lot quicker.
There are so many interesting technologies around for building real time web applications or mobile apps with easy-to-use interfaces and workflows that also integrate with existing backends so you could extract all your data in a relatively straightforward way.
Having a good market data platform, particularly for exchanges, is really crucial. That’s what will pull together all the different types of data that they want to publish in all these different forms. If you have a good centralised market data platform where you could easily say I want all the equities that were traded yesterday or in the last month or look for intraday trends, you are able to more easily deliver new applications to leverage that.
Are there ready-made solutions available or do they have to be built bespoke and what’s preferable?
It’s rarely a one size fits all. Each business has to make a judgement about what makes sense for them. We’ve built bespoke solutions for financial institutions now for over 30 years but in a sense we think we offer the best of both worlds. We have our building blocks providing components for all kinds of trading processes that we use to cut down the time to market.
Sometimes you’ll find that we might provide one part of the overall solution and then another vendor will provide another component. What’s really important there is making sure they’re integrated smoothly. Integrating with existing systems is also a really crucial part of any project.
A key advantage of bespoke is you have more control over what the solution is and how it’s going to work, particularly if you’ve got a unique way of doing things. And whatever you pick there’s always training to do. There’s always integration to do. There’s always testing and deployment to do. A great software partner will make it all come together.