How has lockdown affected Trading Apps?
For us, this has been a very revealing period. As a company we have managed to function remarkably well during the lockdown in the UK. Likewise, and more importantly, our clients have flourished. In a period where market volumes were unparalleled and users were logging in from disparate locations, Trading Apps delivered.
You say that Trading Apps delivered. What difference did it make?
Our product performed really well under pressure. Trading Apps has a proven track record of solving for back-end system difficulties and this played to our advantage at the onset of the pandemic. Because our applications act as a wrapper around the books and records system, they nullify the perceived issues of those systems. This, combined with our automation tools, allowed the traders to cope with the heightened volumes during this period.
Did the sale to BNY Mellon hinder the growth of Trading Apps?
On the contrary, since the split we’ve embarked on an architecture evolution incorporating a move to microservices, Java and cloud/virtualisation infrastructure.
The original architecture has served us extremely well, allowing for the rapid release and deployment of new functionality. However, we recognised that we need to take advantage of other technologies to take the platform to the next level.
Subsequently, over the past 18 months, we introduced supporting technologies so that new microservices can be integrated with existing functionality. This also opens the door to architecture-level refactoring where pragmatic to do so.
Furthermore, our new architecture allows the developers to be flexible in their choice of programming language and framework resulting in easier and quicker functionality builds and improved productivity. All of which translates to a better experience for our clients. In terms of product, we have significantly expanded our functionality stack especially within the broker-dealer space and have continued to push our connectivity program. A prime example is Trading Apps developing a gateway to connect one of our retail broker clients to Bloomberg’s securities lending trading platform, providing them with another route to market.
Additionally, we adopted the Amazon Web Services (AWS) public cloud/infrastructure as a service provider, modifying our applications to work with industry-standard virtualisation components such as EC2, S3 and Amazon Relational Database Service (RDS).
You mentioned the cloud, does Trading Apps now offer a hosted solution?
Yes, we launched a hosted product in Q4 2019 to meet client demand. Historically clients were hesitant to use the cloud, preferring to keep the application on-premise due to several factors, one being security. As cloud providers have matured they have become the ‘new normal’. The turning point for us was during the summer in 2019 when one of our prospective clients said they have “now whitelisted AWS & Azure as providers”.
We know from experience that our applications will create an immediate and dramatic uplift in the capability and volumes of a securities lending operation, and by offering a hosted solution we can ensure a straightforward and quick installation which reduces any downstream internal IT management burden and costs.
As mentioned before, we selected AWS as our provider. We chose to use the AWS platform as it has many advantages, such as its global reach, seamless disaster recovery with multi-site hot or warm standby instances together with being secure, compliant and reliable. Also, AWS offers flexible, automatic scalability based on demand, which is key for a product like Trading Apps.
This strategy allows our clients to manage their needs and solutions at a pace that is non-disruptive, targeted and prioritised, and ultimately under their direct control. We already have two clients using our hosted product with several more in the pipeline.
You’ve made some significant appointments recently, is this a part of your strategic plan?
We have always been heavily weighted to technical staff which is appropriate for a firm in our sector, but this year we have engaged senior individuals. So, yes, this is part of our strategic plan. Den Leonard, our new executive chairman, brings a wealth of business expertise to our senior leadership team and the addition of Colin Smith to our sales force gives us a different route into market participants at the CTO/COO level. However the engagement of Carol Kemm has caused the most market reaction, and so far the feedback is incredibly positive.
Trading Apps at present acts as a front-end wrapper to books and records systems so we are keen to leverage Carol’s knowledge of middle and back-office functions in securities finance from her time at Global One, acting as a bridge between those areas and Trading Apps’ well-developed front-end expertise.
Looking forward, Carol’s expertise will be invaluable as we build out our offering.
In your opening statement, you mentioned that “tomorrow belongs to those who prepare for it today”. How is Trading Apps preparing and what are your plans for the future?
We have been preparing and planning for the past 18 months and we strongly believe that the securities finance market is ready for a change, which will inevitably be driven by technology.
Prospective clients (and some existing clients) are very interested in our hosted offering and so we have been working very hard to build-out our capabilities there. As this is a relatively new area for us, the preparations included a lot of training, learning and some selective hiring.
The key point with our hosting platform is that it is not just there to support the existing Trading Apps suite, but also as a venue for new products, which we have been nurturing alongside our customer projects.
We have focused on expanding our connectivity program to provide streamlined communication between market participants. Regulatory changes such as the Securities Financing Transactions Regulation and the Central Securities Depsositioes Regulation will assist. Moreover, the International Securities Lending Association’s Common Domain Model initiative will undoubtedly influence this further, allowing for increased interoperability as the hurdle of mapping field code names is eradicated.
Trading Apps will continue to push for the reduction of inefficiencies within the market, as in our experience too many transactions and trade life cycle events are still negotiated manually.
We envisage a migration from a centralised model to distributed platforms using peer-to-peer networks (and indeed networks of networks), underpinned by messaging technologies and smart contracts. Apart from the obvious improvement over email and manual processes, this will give rise to other opportunities like service sharing and a move to a Common Domain Model. Like all of our offerings as other requirements arise in the future, these would be able to be implemented quickly and therefore support market evolution.
Despite currently being a small team we think big and deliver on our promises. Our newly evolved infrastructure and architecture will allow us to transform our research and development into deliverable projects, which means 2021 is going to be a great year for Trading Apps.
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