Embodying a competitive spirit
10 June 2024
Competition provides the greatest marginal value to the securities finance ecosystem and is driving GLMX to deliver creative solutions to access liquidity and to automate lending and borrowing, says GLMX president and chief revenue officer Sal Giglio
Image: Sal Giglio
Competition is an existential, enduring characteristic of the human condition, and it carries varying connotations depending on context. It can be seen as an extreme contest where the winner takes all and those that do not win fall away. Think iPhone and Blackberry. To the contrary, competition can be seen to be beneficial overall for those whose ease or quality of life is improved as a result. Streaming video versus DVDs, for instance. As it pertains to financial technology, competition is beneficial both for the industry it serves and for those served by the financial industry.
Peter Thiel, the legendary Silicon Valley entrepreneur and author of the book Zero to One, has provocatively stated that “competition is for losers”. His thesis applies primarily to companies that must vie for customers in markets where products are commoditised. He would prefer to build a business that has monopoly-like control of its market because, in his view, this structure delivers the greatest overall utility to society.
However, others would argue that more options are better as competition maximises innovation. In this worldview, benefits for consumers are obvious: better products through the forces of competition; better service supporting these products and lower relative prices. So, is Thiel correct in his view that competition is not good for companies and that both the product provider and the industry are better when only a single service provider exists?
GLMX, the dealer-to-client (D2C) securities finance trading technology company, firmly supports the notion that competition provides the greatest marginal value to its ecosystem.
Expanding awareness
A primary objective for new entrants into a competitive ecosystem is to raise awareness of the value of its offering compared with incumbents. This marketing effort is multiplied when more firms launch a similar product or service. Access to quality choices drives growth in consumption, which further expands awareness. As a result, this draws new competitors into the space and fuels further innovation and heightened overall utility.
The existence of competitors in a marketplace generally signals opportunity for financial gain. As multiple businesses invest capital, signals are released that the targeted marketplace is healthy and worthwhile pursuing, further expanding awareness. As this cycle of innovation and signalling repeats itself, consumer choice is maximised. Competitors have an incentive to remain hyper-focused on resource allocation, with its attendant implications for further efficiency gains.
Building a repeatable process
For new competitors in a given marketplace, the question — how do we out-compete the incumbent base? — is both initially and ultimately existential.
The answer is through persistent, constructive differentiation. When selling a similar product or service to a single customer base, the key to winning business while aspiring to be the market leader is to provide an improved, differentiated product.
Creating a product that is preferred by the client-base is not easily done, but successful companies urgently and continuously drive to build products which improve client workflow in a manner that their competitors struggle to match. GLMX has achieved this in the repo market by building innovative, intuitive and comprehensive technology that serves both individual users through enhanced customisation and the industry overall through the efficiency gains driven by its extensive network connectivity.
As an independent and a relatively unknown entrant to the repo market a decade ago, GLMX has constantly needed to outperform the industry’s much larger incumbent technology providers, both with the functionality of its technology and the responsiveness of its client support.
That need drives the company to develop streamlined processes which tie success to the ability to rapidly develop and deliver customisable technology solutions, based directly on user feedback. GLMX’s CEO Glenn Havlicek describes this simple yet difficult to execute process: “The critical GLMX differentiator is our process — refined over several years and numerous development cycles. The process is simple and highly effective. First, listen carefully and with a critical ear to clients’ needs. Second, develop quickly. Third, test new functionality with clients in a real-world trading environment. Fourth, refine functionality as empirical evidence suggests. This is a continuous process for us.”
Consistent with its belief that exceptional and combined functionality and support provide an irreplaceable path to success, GLMX delivers a differentiated product and premium client service, striving to ensure that clients receive consistent, superior levels of attention at each touch point — from sales to tech integration to client support. This level of professional engagement provides a customer experience that creates a sense of trust and consistency, instrumental to the growth of client use of GLMX technology.
Also critical to successfully serving clients and competing with entrenched interests, GLMX is manically committed to maintaining the nimbleness of its startup roots. To this end, efficient collaboration across our teams, and direct engagement with clients, remains paramount.
Success and the subsequent client loyalty, combined with attention to rapid responses, generates increasing requests for GLMX to build technology-enabled solutions to complex problems where others have tried and failed, perpetuating the virtuous circle of innovation.
Opportunity in securities lending
The securities lending market has entered a transformative period. Complying with recent regulation has taken up a lot of the industry’s collective energy and the changes made as a result have profound effects on market structure. How market participants access liquidity and process transactions is also at an inflection point. There is renewed focus on this important segment and, as such, there is an opportunity to evolve market structure, with the direction this structure takes firmly in the hands of those who engage the market every day, enabled by providers of modern technology.
Healthy competition across technology providers is emerging as the industry begins to seek and foster new solutions. Whether this openness is motivated by a need for trading contingency, driven by regulators, boards of directors and senior managers who are looking to mitigate liquidity and operational risk, or by traders and salespeople looking for overdue, updated technology solutions to further automate the borrowing and lending process, it is happening.
The securities lending industry is massive and systemically important. According to estimates by S&P, revenue of almost US$13 billion was generated by securities lending activity in 2023. In addition to revenue, and perhaps more importantly, the ability to source securities and cash efficiently has significant implications for the broader equity and fixed income markets.
At GLMX, we believe that technology which enhances the location and exchange of liquidity in securities lending is ripe for competitive disruption and attendant improvement. It is within this environment that GLMX has plenty of experience.
As an independent company charting a new path in delivering technology to securities finance, GLMX employees embrace and embody the highest forms of “competitive spirit”.
Recent conversations, ranging from senior managers to salespeople and traders who are prosecuting day-to-day business across lenders and borrowers, have clearly revealed that the industry, with few exceptions, is actively pursuing alternatives in pursuit of increased access to liquidity.
The company that has existing fit for purpose technology has proven it can quickly and efficiently build new technology to support inevitable market evolution, and can scale its network to grow liquidity pools, is the clear choice to fill that void.
GLMX has been there, done that.
Peter Thiel, the legendary Silicon Valley entrepreneur and author of the book Zero to One, has provocatively stated that “competition is for losers”. His thesis applies primarily to companies that must vie for customers in markets where products are commoditised. He would prefer to build a business that has monopoly-like control of its market because, in his view, this structure delivers the greatest overall utility to society.
However, others would argue that more options are better as competition maximises innovation. In this worldview, benefits for consumers are obvious: better products through the forces of competition; better service supporting these products and lower relative prices. So, is Thiel correct in his view that competition is not good for companies and that both the product provider and the industry are better when only a single service provider exists?
GLMX, the dealer-to-client (D2C) securities finance trading technology company, firmly supports the notion that competition provides the greatest marginal value to its ecosystem.
Expanding awareness
A primary objective for new entrants into a competitive ecosystem is to raise awareness of the value of its offering compared with incumbents. This marketing effort is multiplied when more firms launch a similar product or service. Access to quality choices drives growth in consumption, which further expands awareness. As a result, this draws new competitors into the space and fuels further innovation and heightened overall utility.
The existence of competitors in a marketplace generally signals opportunity for financial gain. As multiple businesses invest capital, signals are released that the targeted marketplace is healthy and worthwhile pursuing, further expanding awareness. As this cycle of innovation and signalling repeats itself, consumer choice is maximised. Competitors have an incentive to remain hyper-focused on resource allocation, with its attendant implications for further efficiency gains.
Building a repeatable process
For new competitors in a given marketplace, the question — how do we out-compete the incumbent base? — is both initially and ultimately existential.
The answer is through persistent, constructive differentiation. When selling a similar product or service to a single customer base, the key to winning business while aspiring to be the market leader is to provide an improved, differentiated product.
Creating a product that is preferred by the client-base is not easily done, but successful companies urgently and continuously drive to build products which improve client workflow in a manner that their competitors struggle to match. GLMX has achieved this in the repo market by building innovative, intuitive and comprehensive technology that serves both individual users through enhanced customisation and the industry overall through the efficiency gains driven by its extensive network connectivity.
As an independent and a relatively unknown entrant to the repo market a decade ago, GLMX has constantly needed to outperform the industry’s much larger incumbent technology providers, both with the functionality of its technology and the responsiveness of its client support.
That need drives the company to develop streamlined processes which tie success to the ability to rapidly develop and deliver customisable technology solutions, based directly on user feedback. GLMX’s CEO Glenn Havlicek describes this simple yet difficult to execute process: “The critical GLMX differentiator is our process — refined over several years and numerous development cycles. The process is simple and highly effective. First, listen carefully and with a critical ear to clients’ needs. Second, develop quickly. Third, test new functionality with clients in a real-world trading environment. Fourth, refine functionality as empirical evidence suggests. This is a continuous process for us.”
Consistent with its belief that exceptional and combined functionality and support provide an irreplaceable path to success, GLMX delivers a differentiated product and premium client service, striving to ensure that clients receive consistent, superior levels of attention at each touch point — from sales to tech integration to client support. This level of professional engagement provides a customer experience that creates a sense of trust and consistency, instrumental to the growth of client use of GLMX technology.
Also critical to successfully serving clients and competing with entrenched interests, GLMX is manically committed to maintaining the nimbleness of its startup roots. To this end, efficient collaboration across our teams, and direct engagement with clients, remains paramount.
Success and the subsequent client loyalty, combined with attention to rapid responses, generates increasing requests for GLMX to build technology-enabled solutions to complex problems where others have tried and failed, perpetuating the virtuous circle of innovation.
Opportunity in securities lending
The securities lending market has entered a transformative period. Complying with recent regulation has taken up a lot of the industry’s collective energy and the changes made as a result have profound effects on market structure. How market participants access liquidity and process transactions is also at an inflection point. There is renewed focus on this important segment and, as such, there is an opportunity to evolve market structure, with the direction this structure takes firmly in the hands of those who engage the market every day, enabled by providers of modern technology.
Healthy competition across technology providers is emerging as the industry begins to seek and foster new solutions. Whether this openness is motivated by a need for trading contingency, driven by regulators, boards of directors and senior managers who are looking to mitigate liquidity and operational risk, or by traders and salespeople looking for overdue, updated technology solutions to further automate the borrowing and lending process, it is happening.
The securities lending industry is massive and systemically important. According to estimates by S&P, revenue of almost US$13 billion was generated by securities lending activity in 2023. In addition to revenue, and perhaps more importantly, the ability to source securities and cash efficiently has significant implications for the broader equity and fixed income markets.
At GLMX, we believe that technology which enhances the location and exchange of liquidity in securities lending is ripe for competitive disruption and attendant improvement. It is within this environment that GLMX has plenty of experience.
As an independent company charting a new path in delivering technology to securities finance, GLMX employees embrace and embody the highest forms of “competitive spirit”.
Recent conversations, ranging from senior managers to salespeople and traders who are prosecuting day-to-day business across lenders and borrowers, have clearly revealed that the industry, with few exceptions, is actively pursuing alternatives in pursuit of increased access to liquidity.
The company that has existing fit for purpose technology has proven it can quickly and efficiently build new technology to support inevitable market evolution, and can scale its network to grow liquidity pools, is the clear choice to fill that void.
GLMX has been there, done that.
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