Silicon Valley Meets FinTech
With Steve Grob, Global Strategy Director, Fidessa
The whole financial technology industry is in the process of reshaping its approach towards technology. This presents our customers and prospects with a dual problem. First, how to develop and compete in a cost-constrained environment and, second, in this new super-transparent world, how do people demonstrate and prove their value add to the process?
When examining other parts of the technology universe, it is clear that many interesting think tanks and projects are emerging; for example blog teams, data visualisation and social media interpretation. The problem for our industry is how these firms find their way into capital markets, because the main issue of concern is credibility. What about information security? What about compliance resilience and viability? These firms do not have the capacity to answer these questions for large institutional clients.
As a result we identified an intriguing opening for Fidessa to get involved in this ongoing technology shift. It involved sourcing a number of firms that we could curate and carry out the necessary due diligence, in terms of their data centres, legal agreements, as well as embedding their technology into our workflow. This is a ‘win-win’ for all – the technology company gets access to all our customers, and our customers are able to access something that has already been pre-certified. OTAS was the first firm to go live on this platform.
Making the transition
The advantage for us is that these new and relevant technologies are entering our ecosystem and empowering customers to do what they do better. It marks a change from us having to write everything ourselves, to recognising that we have access to a great community of buy- and sell-sides, and we can help them find and utilise the technology they want to be able to access.
Our clients are happy because it gives them access to a new wealth of interesting technology, and allows them to demonstrate their relevance and to have deeper and more meaningful conversations internally and with their clients.
One of the challenges in making the transition from being an upstart Silicon Valley firm into a financial technology lexicon of the industry, is using full language and terms that mean very specific things. It has been necessary to educate the tech firms on how best to use their technology in a way that makes sense for our customers – this has been a steep learning curve. We have also learnt a great deal about how various types of firm approach technology and how different industries handle development and deployment.
We see this as a global platform and have had just as much interest from the US as we have had from Europe. Again, this is a way of helping ‘jumpstart’ some of these new firms into an area that might otherwise take them years to develop – they can do it with us in just a few days. And of course, we can also use our technology and reach to build something better, so for example we can provide global datasets that they might not otherwise have access to.
This is very different to an app store for example where, if you buy an app for $0.99 and it doesn’t work, you have no point of redress. Whereas our value added is in ensuring that the firms we bring in (a much smaller number than in an app store), really add value to our workflow.
Another issue worth considering is that today’s industry needs to solve its cost and relevance problem. In any ecosystem, every member must benefit more than they would otherwise outside it, whether that be the providers of the service or the consumers of it.
It is very much becoming a reshaped industry and firms that can find their way to demonstrate that successful blend of technology and innovation are going to be more successful. In tomorrow’s super transparent world, simply getting in between a customer and source of liquidity will not be a viable proposition. Firms are going to have to collaborate and cooperate and each add value at every stage of the process.
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