Chris Valentino sits down with SLT to discuss how Trading Apps not only talks the talk but walks the walk when it comes to being an efficient and nimble technology partner
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What would you say it is that sets Trading Apps apart from other technology providers in this crowded space?
As you know we do have a whole host of standard applications. But if there is anything that I have learned in this business it is that no two clients are exactly the same. They may be operating the same business models with the similar data sources and identical underlying architectures but if there is one consistency amongst all participants in this market it is that they need bespoke solutions that fit their particular business within their very own ecosystem. And, while it is certainly true that with standardisation comes scale we think it is more important to build solutions that meet the demands and criteria of our individual clients as opposed to the market as a whole.
I also think that because of our flexibility and the fact that we are a modular front-end system we have gotten very proficient at connectivity as it pertains to underlying and systems. Let’s face it, in many instances the underlying architecture is just too entrenched and expansive to disrupt. Implementing some of our applications is a great and very strategic way to modernise your systems without engaging in an expensive and potentially risky systematic overhaul.
Could you walk through what this means for your clients specifically?
Sure, I would be happy to. We have been working closely with a broker-dealer client for the past several years on a number of initiatives such as connectivity to various liquidity pools and sophisticated process automation.
Most recently the client asked if we could build a screen that would not only allow them to track their profit and loss (P&L) in real time but also to have transparency into what was fueling or exerting pressure on their intraday profitability.
Building the screen was the easy part but getting all of the necessary data from the underlying systems was the challenge. We are fortunate enough to have an extremely talented team that is as technologically advanced as they are rich in securities finance domain expertise.
The client now has a real-time window into profitability with the ability to see how that P&L is impacted by market activities such as rate changes, returns, marks, etc, with drill through capabilities down to the individual trade level.
It is amazing how something as basic as this has escaped this market for so long. And probably one of the most rewarding parts of this piece of work is that it really isn’t something that we planned for at the beginning of the year.
As our partnership has grown with this client and our understanding of their business has expanded it just became a very logical next course of action. It really speaks to our ability to pivot as an organisation and develop sophisticated tools at a very rapid pace that our clients are asking for.
I don’t think there are many technology vendors in this market that could live up to this kind of agility. By the time the year is up the client will have received four major releases with countless interim releases and enhancements along the way.
Besides this, what else has Trading Apps been up to?
Well I think every technology player in this market is working on ways to automate and provide greater centralisation and transparency of information. One of our clients just recently went live with our Cross Book Optimisation suite of tools.
What does that do?
For one, it automates a ton of the mundane activities that the desk had been engaged in during the day and provides a greater opportunity for them to focus on higher margin activities.
It essentially covers the desks shorts automatically and in the most efficient manner possible. Liquidity is sourced internally first and once that avenue has been exhausted it will look to the street to cover the remaining positions. The feedback from the client has been very positive and the efficiency gains are material. The same can also be done on the return side of the equation for any excess borrows.
These are all very basic solutions but for many of our clients they have operated for years without them. Perhaps the technology is out there and exists but in order for it to be fit-for-purpose it needs to be molded into a solution that works for each and every market participant. I believe that is the value and one of the key differentiating factors that we bring to this market.
So what is next for Trading Apps?
As you know, BNY Mellon recently purchased our agency lending securities finance software and associated intellectual property. I truly believe that speaks to the quality and sophistication of our tools. With that event clearly behind us we have been able to focus a tremendous amount of time and energy on our existing and soon-to-be new clients.
The end of this year and next year should be very busy for the organisation. We have a very strong pipeline of clients and products such as a private cloud offering for any of our applications. This is something that is becoming more and more prevalent in the market and just makes a ton of good business sense.
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