The past couple of months have been dominated by COVID-19, can you tell us what it has been like leading a business through these challenging times?
Our management team huddles every morning to review not only team performance, but also check in on people more personally. Who is doing well, and who is struggling? Where can we offer support or resources? That morning session enables us to continue sharing information on our business, our people and our response to the pandemic. But it also provides welcome moments of connection, which has become a highly-prized commodity in this new environment.
I’ll be honest. It has been a hard adjustment for me personally. As my EquiLend colleagues will attest, I am a very social person and enjoy being surrounded by others in the office. While I do have an office for one-on-one meetings, I spend most of my time sitting out on the floor with everyone. There is so much organic ideation and creativity that happens when you’re surrounded by an excellent team. That collaboration is a huge part of the business, so it’s very strange to now be working in a manner where there is a lot of isolation - that is something I never saw coming nor fully appreciated previously. That said, despite some of those challenges, we have worked quite well in a remote environment. As a global business, we have been using video for inter-office communication for more than six years. We were able to enact our business continuity plan and transition seamlessly to work-from-home because of the groundwork we have laid over the years for unpredictable situations such as these.
How is EquiLend preparing to return to office-based work? Have any of your offices already returned?
Our Hong Kong office is really going to be taking the lead here. They were naturally impacted earlier than our operations that cover the US and the EMEA (Europe, the Middle East and Africa) region, not only because of their proximity to the original epicentre of the virus, but also through the riots in the city. It has been really valuable to be able to learn from their experience and apply that knowledge elsewhere. The shift to opening offices up again is going to evolve in a very localised fashion that takes into account the relevant jurisdictions’ regulations and the rules of the landlords on the ground, as well as the safety of our employees. Working remotely has functioned quite well for us, and we do not intend to be the first movers back to an office environment.
EquiLend has had a busy year bringing new products to market. Can you tell us more about these innovations and the motivations in launching them?
Our innovation whiteboard is always filled corner to corner. Our team is fixated on constant innovation. That company ethos pushes everyone within the business to not only respond to client needs but anticipate and get ahead of them. We’ve launched several new products in the past six months that illustrate our innovative approach: Swaptimization automates the total return swap trading workflow, and our Collateral Trading Service gives clients a centralised, efficient way to upgrade and trade collateral. We’ve also launched EquiLend Exposure, a centralised exposure management platform, and our solution for the Securities Financing Transactions Regulation (SFTR) is ready for reporting go-live in July. These recent product developments are the latest evolution in our 20-year journey of delivering innovative solutions that meet the shifting needs of the securities finance—and now collateral and swaps—marketplaces.
How has the product expansion impacted the business? Has it required additional resources across employees and offices?
It’s an understatement to say that EquiLend is growing across every facet of the organisation. This has been driven largely by two factors: first, we continue to anticipate and respond to industry needs and launch new products that the industry wants; and, second, we see an increased need for our established product set. We are the biggest, broadest virtual exchange in securities finance - no one is doing what we are doing at this scale. We have increased our headcount and global operations to keep pace with the market demand and in anticipation future expansion. In what is really a key barometer of success for me, that growth has not just been confined to our US headquarters. We have experienced phenomenal growth in Europe, led out of our London and Dublin offices, but also across Asia in Tokyo, Hong Kong and beyond.
What is your outlook for EquiLend in the next 12 months? Do you foresee continued growth?
We expect take-up for the products we’ve launched in 2020 to be considerable, but we won’t be resting on our laurels. Our development pipeline is strong, and we will continue to innovate in post trade, as this is a major area of inefficiency in this market.
We are also focused on delivering the best and cleanest market data to clients, which is increasingly a crucial tool for market players. What I constantly find remarkable is that many of the tools available to the industry to manage middle- and back-office flow are archaic, unmanageable and come with huge price tags attached to them. A key focus for us in the next 12-24 months will be closing the gap on the existing products to bring efficiency and cost-effectiveness to the market at scale.
Beyond COVID-19, what other headwinds, or tailwinds, do you expect the securities lending industry to face this year and into 2021?
It won’t come as a surprise that technology is top of my mind here. We have seen the market evolve and advance considerably over the past five to 10 years, particularly with regard to technology. The extraordinary volume of transactions over the past few months has required market participants to rely more than ever on technology, in particular automation. In February this year, the trade count on NGT hit over 140,000 in a single day, a historical record. Clients were transacting in record numbers on our NGT platform and record post-trade processes in our Post-Trade Suite while transitioning to a work from home environment. They wouldn’t have been able to do that without having automated those processes on our platform. After COVID-19, I expect to see those increases continue and adoption of technology and automation to accelerate. I really hope to see a similar take-up of enhanced technology in the post trade space and in other corners of the market, such as collateral and swaps. Pandemics and other crises are going to necessitate that middle- and back-office solutions become more fully automated to allow the rest of the business to flourish. Innovation in these areas will ‘future-proof’ businesses and introduce efficiencies that will enable them to scale and thrive going forward, whatever challenges may be yet to come.
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