As a follow on to our last published thoughts and ponderings on the Electronification of markets we turn our attention to the current landscape and how, if at all, the restrictions imposed upon business and society in general have affected the fintech industry and more specifically the Electronification of Markets
One of first things that jumps out to us is how we all interact with each other. As a commercial business we need to reach customers and one of those opportunities to do so was events, seminars or conferences.
Clearly, all completely cancelled, and the alternative has been online “conferences” which really do not have the same impact. Personal discussions and introductions, often impromptu and spontaneous occasionally turn in to commercial relationships.
However, the best and most effective approach was always, on site meetings, face to face conversations about adding value to your business by embracing new technology and more efficient workflow solutions.
Paradoxically, due to home working, it is a time when many are not looking to adopt change even though it is now more than ever that technology and more specifically, Electronification of the remaining OTC instruments, can benefit a market participant either “Maker” or “Taker”.
The increase in operational risk from home working is almost completely mitigated by Electronic workflows and Straight Through Processing (STP). A decent Broad Band speed is very often easier to come by than an adequate Mobile signal out in the “Shires” and that is certainly the case for me.
It seems completely unthinkable that many home working Retail Traders are trying to eke out a living with access to huge liquidity pools across many asset classes in real-time via the likes of Saxo, CMC or IG (other Retail Brokers are available, not an endorsement) whereas some Institutional Traders have little more than a Chat window on a market data terminal or email to negotiate a trade risk managed on Excel. And before you say the Retail world is vanilla products, you can stream FX Options on Retail platforms and have been able to for over a decade!
Many people that were planning on returning to the office are now making U-turns as Government advice becomes as volatile as the markets themselves with ever more Gamma in the affect it has on businesses and no real logic to it. But as they say, you can only control the controllables.
As it becomes more clear that working from home is going to be something you as an individual will need to do effectively and efficiently far more permanently than you ever thought, whether you like it or not, having the most efficient IT set up is absolutely essential to keep pace.
This discussion is already happening in the most forward thinking of Board Rooms and Regulators such as The European Banking Authority and the FCA are pushing for Operational Resilience and imposing deadlines which means digitisation is brought to the fore, if you are to take anything from the next six months let it be the ability to work from home as well, if not better, than you do in the office. It is not something you should “mask” (sorry about that one).
Stay safe, control your working environment, save time!