Industry Trends | November 6, 2023

Leveraging Interoperability to Build Out Best-of-Breed Trading Platforms

Written by Katina Male

trading platforms

During the recent A-Team Group event, ‘Buy AND Build: The Future of Capital Markets Technology London’, our Director, Head of Product Solutions, Reena Raichura took part in the ‘Leveraging Interoperability – Laying the Foundations for Unique Best-of-Breed Solution’ panel. She was joined by Will Winzor Saile, Partner, Execution Analytics and Architecture, Redburn Atlantic, Rob Moffat, Senior Technical Architect, FINOS and Ben Jefferys, Global Head of Technical Pre-Sales, Genesis Global.

Moderated by industry veteran and founder of consultancy firm Vision57, Steve Grob, the panelists examined the growing need for interoperability on the trading desk, shedding light on how technologies like smart desktops, low/no-code solutions and microapps/microservices can help fulfil this surging demand.

We delve into some of the key points the group discussed during the panel session below.

The trading platforms of the future

Rob opened the discussion by giving a brief summary of FINOS and the organization’s efforts to accelerate collaboration within financial services by embracing open-source software, standards and best practices, as well as the Financial Desktop Connectivity and Collaboration Consortium (FDC3) standard for interoperability. There was a consensus from the panel that although FDC3 is a great initiative, it’s only laying the groundwork for a much deeper path towards total interoperability.

Reena took the stage and indicated that while FDC3 is a commendable standard, and is a lead maintainer as well as a contributor of it, it currently represents only a small part of interoperability and allows basic workflow integration between web technologies. Achieving more advanced levels of workflow integration and interoperability in general requires seamless integration between all types of technologies such as legacy monolith systems, native applications, Citrix applications or even applications still running on Visual Basic 6.0!

The discussion then moved beyond workflows. Reena educated the audience on other crucial features of interoperability, which were a must-have for firms looking to build best-of-breed platforms. These included the development of microapps, the creation of app stores, cross-application windows management through workspaces and layouts, centralized notifications with next-best actions, global searching and more. She emphasized that the ultimate goal of interoperability is to achieve a unified desktop experience for end-users, blurring the boundaries of applications and allowing users to focus on their jobs while maintaining high levels of productivity and being more effective.

Reena took the opportunity to introduce everyone to her concept of Straight-Through Workflows™ which was inspired by Straight-Through Processing and the way it united the equities trading community in the ‘90s to solve the complex problem of back-end systems integration. In Reena’s opinion, Straight-Through Workflows has the same power to solve a major business and technological problem that is impacting the financial services industry today – the fragmented desktop. To achieve this, the community needs to come together and welcome a paradigm shift in design thinking for the desktop where the borders of applications transcend and designing and building workflows is the main priority. Users and their workflows need to be at the heart of the design process and applications should be viewed as components that support that. “Build workflows, not applications,” said Reena. “No application is an island.”

Will agreed with Reena and referenced incumbent technology vendors who compete for dominance on the trader’s desktop. They often add numerous functions in their attempts to monopolize their workspace and ultimately struggle to perform across all these functions effectively, creating a problem for end-users. Many firms now solve this by finding different applications for different functions – one for charts and data, one for core O/EMS and so on. But usually, none of these platforms have been made to talk to each other, leading to inefficiencies, errors, and makeshift solutions. Interoperability platforms provide a far more effective way of dealing with this as they go beyond streamlining workflows. They also offer comprehensive real-time actionable insights, adding substantial value for traders.

“The only way to get traders to shift their workflow is to simplify it and add a lot of value to it, which comes through interoperability,” Will summarized.

Optimizing interoperability practices and collaboration strategies

On the topic of best practices around interoperability, Reena once again emphasized the monumental shift in design thinking that needs to happen. The mindset of only being a ‘buy shop’ or a ‘build shop’ needs to change too. In capital markets technology stacks tend to be 15 to 20 years old so for firms wanting to accelerate innovation and move to the digital age, an optimal strategy involves a combination of buying, building, and blending – a strategy that Reena has aptly named ‘Buy, build and blend’.

She also noted that development teams should no longer be working in isolation and need to consider the broader ecosystem and the users’ full journey when interacting with applications. To reap the full rewards that come with interoperability, you need to understand the problems that you are trying to solve from both a business and technology standpoint first, shift your design thinking, promote open collaboration between teams internally as well as externally, and implement good governance.

Reena also highlighted that a buy, build and blend strategy requires strong partnerships. Therefore, when selecting technology partners, she said, it is not just about ensuring that the technology meets business needs. It is also about the customer experience you have with the technology vendor. Solid industry expertise, commitment and effective collaboration are just as imperative.

Will emphasized the abundance of choices we see today in the move towards interoperability. In the past, the focus was on choosing one full-stack vendor, but now the emphasis is on selecting components of that stack and considering how to integrate them. He pointed out that from an end-user perspective, he would rather have ten different vendors who specialize in what they do, over one that attempts to do everything. “It’s more to manage but the results are much greater,” Will said.

The group agreed that this shift means that firms now carry greater responsibility and risk for the solution. Ben, however, pointed out that there are also many benefits that come with it, like the agility and flexibility to modify components readily, for example, where low/no code technologies excel. Additionally, firms can also test new vendors for certain components without any long-term commitments. This is a level of flexibility that allows for quick integration and evaluation.

Final thoughts

To wrap up the panel session, Steve invited questions from the audience. One person asked how large, established vendors are reacting to interoperability. While the uptake has been slow, we are now seeing more incumbent vendors, such as O/EMS platforms, taking a visionary approach to interoperability and understanding that being part of an ecosystem gives them a competitive edge. Therefore, some of these vendors are modernizing their own product suite, building their own best-of-breed platforms using interoperability, and then taking it to their clients’ desktops.  

The final question was, how does one start a desktop interoperability project? Reena explained that we typically see two distinct paths to desktop interoperability. The first is starting with simple workflow integration, where clients want to stitch up a couple of critical applications such as their OMS with Bloomberg, automate the workflows between them and then build from there. The second is clients looking to build out best-of-breed platforms from scratch. For this, Reena suggested that the best place to start is to use a product like io.Insights, which allows firms to track how users are working in their current applications – what windows they actually use, what features and data points they clicked on etc., as well tracking how they are moving and working across applications. She highlighted that this allows firms – whether they are vendors or end clients – to understand the current state, which will then inform the future state.

Reena ended the session by once again highlighting the importance of collaboration in the industry and the fact that we’re already seeing an increase in inter-company interoperability. Firms from both the buy side and sell side are progressively sharing applications and enhancing each other’s desktop experiences. A trend she fully expects to continue.

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