Capital markets need to change the speed of software development and cut the length of time to market for new services.
Amazon engineers are said to deploy new code on the technology company’s website every 11.7 seconds. This flexibility was achieved after moving to the Amazon Web Services cloud and a microservices architecture.
Microservices breaks a problem into small components of functionality, while ensuring that the data they use is consistent in real-time. Firms can stop using monolithic architecture which is difficult and expensive to change without building a new version of the whole application.
Stephen Murphy, chief executive of genesis, launched the company with James Harrison in 2015 to build a microservices framework for capital markets which allows software to be developed up to 80% faster and cheaper.
genesis has completed a $3m Series A financing round from Illuminate Financial Management, a UK venture capital firm specialising in institutional financial services, and Tribeca Angels in New York. The firm has also partnered with OpenFin, the operating system which provides interoperability for applications across desktops in financial services.
Murphy previously held senior roles in firms including Goldman Sachs, Merrill Lynch, HSBC & BTG Pactual in London, New York, Hong Kong & São Paulo. He spoke to Markets Media about the changes in capital markets since genesis launched, providing a platform as a service, citizen developers, the winners that will emerge from the digitisation of capital markets and the skills that will be required in this new world.
MARKETS MEDIA: Why did you launch genesis ?
STEPHEN MURPHY, genesis: We started genesis because it was critical for capital markets to change the speed of software development and cut the length of time to market for new services. Capital markets needed to change the old paradigm of either building applications internally or buying a black box solution from a vendor.
MARKETS MEDIA: How have capital markets technology changed in that time ?
STEPHEN MURPHY, genesis: There has been adoption and acceptance of the cloud. Firms not only cut costs but can find extra alpha from crunching more data without having to permanently change their technology stack.
MARKETS MEDIA: How have capital markets benefitted from microservices ?
STEPHEN MURPHY, genesis: Microservices and the ability to develop software with low code or no code has resonated with our clients so they have been able to build scalable and resilient applications more quickly and cheaply .
For example, in May we launched Creative Studio, a platform as a service (PaaS) for capital markets. Creative Studio allows client to develop and deploy scalable and interoperable products over the web on the OpenFin operating system without needing to write any code. Applications can be delivered in hours, instead of the usual weeks and months.
There has also been a lot of client interest in Automated Quoting System (AQS) which is a complete multi-asset class ‘bank in a box’. The application can automate workflows, including post-trade, for treasury, broker dealer and wealth management clients over the web and also directly onto OpenFin’s operating system.
We have changed market perception and shown that software can be developed at low cost while meeting the requirements for resiliency of a capital markets platform.
MARKETS MEDIA: What trends do you expect in capital markets technology ?
STEPHEN MURPHY, genesis: There will be continued acceptance of the cloud. It is not just a pure infrastructure cost play but will be used by clients from end-to end: from gathering requirements for new applications to deployment in a new environment like we do at genesis. We will be launching a service for clients to manage their cloud environment.
The type of people working in capital markets is already different from when I started in 1991, but is now ripe for change. Outside finance, organisations are using citizen developers who analyse businesses and build low- or no- code solutions. The type of resources needed in capital markets will change and will not just be coders.
The mindset has changed as participants have realised they need to be part of the wave, rather than resisting. For example, ex-traders are coming to us who want to change the municipal bonds market as it is ripe for disruption and we are working with a European client on changing syndicated loans.
Legacy technology will eventually be transformed into state of the art microservices but this could take up to 15 to 20 years.
MARKETS MEDIA: Who will emerge as winners as capital markets become increasingly digital ?
STEPHEN MURPHY, genesis: Capital markets have reached and inflection point and the winners will be innovate technology firms who are embracing disruption. Incumbent vendors need to change as financial firms are investing in fintechs and strategic partnerships as they recognise that it is critical to transform.
