Industry newcomer Hudson Fintech has unveiled a new securities finance front-office technology platform for sell- and buy-side institutions, based on a core technology that is unique to the financial markets.
Hudson’s company mission statement states its aim is to revolutionise processes and tackle the “stagnant financial software market”.
According to Hudson, its software captures and displays trade and market data, provides position blotters and real-time analytics, as well as support end-to-end workflow processes.
It also promises to improve efficiency and risk management, while lowering the processing costs of trades.
In a statement on the launch, Hudson said that the platform gives financial institutions more ownership and control of trading operations, while the software provides the tools and capabilities to allow customers to quickly adapt to changes in the regulatory landscape, such as the Securities Financing Transactions Regulation.
Hudson was co-founded in March by Michael Walliss, who acts as CEO, Troy Peterson, who serves as product technical lead, and Dietmar Nowatschek, who is the product owner.
Walliss brings experience running technology start-ups, while Peterson specialises as a lead developer for trading systems focused on repo, prime brokerage and fixed income.
Nowatschek has more than 22 years of experience in the global banking sector on both the vendor and the client-side and has focused on analysis and development in front- and middle-office areas.
Under the hood
The Hudson platform is built on an advanced system architecture, known as an entity-component-system (ECS), which was first developed by the online gaming industry to allow for regular software patches to be completed with minimal disruption to players.
As such, Hudson’s new ECS technology platform is designed to be implemented quickly, in parallel with existing systems, with little regression testing.
ECS architecture works with a data model where all objects become individual entities to which arbitrary data can be added or removed at runtime, Hudson explained in the statement.
Business logic is implemented in the form of unique behaviours that operate on combinations of attached data components.
This new style of data model aims to resolve legacy issues, where traditional ‘hierarchical’ systems are interdependent on other components of the system, Hudson added.
Hudson promises that, with fewer interdependencies, its platform can be flexible in the event of a regulatory or technological change to the business, as well as faster to develop, and ultimately less expensive.
The fintech added that this is achieved by extensively reusing existing code with continuous automated testing, meaning that less time is spent on manual regression testing.
As a result, Hudson aims to significantly reduce the time taken to upgrade systems and to cut typical licence fees by up to 50 percent, which it said reflects institutions’ needs to reduce costs and increase efficiency.
Why launch now?
A spokesperson for Hudson confirmed that the platform is now live but does not currently have any clients on board, although several sell-side institutions are conducting tests with Hudson’s software.
The spokesperson added that the impetus behind the new platform was demand from banks for a more modular and light-touch technology solution that would solve the new demands of today’s securities finance market environment, including post-crisis regulatory frameworks.
As a result, Hudson was established to resolve financial institutions’ new requirements for increased regulatory reporting and transparency, improved risk management processes, and balance sheet constraints.
In its launch statement, Hudson outlined that regulators around the world demand increased data control and reporting, leading to many financial institutions reviewing their outdated legacy systems, typically using multiple technology bolt-ons, which limit the flow and efficiency of trading operations.
As the financial markets continue to evolve, many of the larger sell- and buy-side institutions are moving away from all-encompassing technology solutions that are difficult to install, Hudson said.
The fintech added that specialist firms are able to offer easy to implement technology modules that address specific issues without impacting an entire technology stack.
Rupert Bull, CEO of The Disruption House, a banking technology consultant that is currently reviewing Hudson, said: “As many existing technology platforms reach their end of life, we see a demand for a new technology player in repo trading.”
“There is also a desire towards a component-based approach, as opposed to implementing enterprise systems.”
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