Stronger together
Fragmentation is the real barrier to efficiency in trading and interop.io is tackling it head-on. Fixed income markets are materially more complex to navigate than other instruments and nowhere does that become more apparent than on the trading desk. One of a trader’s greatest sources of friction when working the market is the need to work across multiple screens and platforms on any given trade.
Unsurprisingly then, traders who are using interoperability tools provided by interop.io are effusive about the abilities it gives them, and made a great case for the firm to be awarded ‘Best Tool for Trading Efficiency’ this year.
“The most rapid expansion that we’re seeing for interoperability is on the buy side, and specifically around fixed income,” says Dan Schleifer, President and Founder at interop.io. “Fixed income is spoken of as a single asset class, when in fact it is made up of multiple asset classes. Within those you have geographic fragmentation, a market that has generally been under-invested in from a technology standpoint, a lot of complexity, a lot of workflow silos, and users that are used to doing things in slow, old-fashioned ways. Integrating with a platform like interop.io can have real demonstrable business ROI.”
European market firms based in the UK – often where large trading desks are based – have embraced the technology and demand in major markets such as France, Italy and Germany is also taking off.
With consolidation continuing within the financial sector, the commercial siloes between rival offerings can be brought into sharp contrast creating additional operational challenges for capital markets front offices.
“We frequently encounter people that have multiple order management systems through acquisition, or within a given firm use different EMSs for different asset classes, and have no way to pull together a consolidated view across them,” Schleifer says. “Then there are different venues that have their own front ends and pre-trade tools that are giving insight to the users about what’s happening in the market, from a liquidity standpoint, with a variety of post-trade tools that are able to show order execution and best execution.”
Productivity tools may be focused around Microsoft Office tools with Excel and Teams, but communications can equally be run across Bloomberg and Symphony to support productivity and collaboration. These go beyond the trading desk; they are critical for portfolio managers and risk teams on the buy side and sales to trading workflows on the sell side.
“Those need to come together to build straight-through-workflows using interop.io to deliver an integrated experience for the user,” he says. “So tackling OMS and market data terminal integration is always priority number one, but then you start stitching in the other pieces with pre-trade, post-trade, and the productivity suite.”
The goal is always the same, feeding all necessary information to users when it is contextually relevant, from all the sources they have available so they can access to everything they need contextually to make their decision.
Internally the firm has not only been developing tools and services but benefiting from the merger between Glue42 and Finsemble in June 2023.
“The merger is our big, exciting news,” says Schleifer. “The two firms were direct and fierce competitors but always respectful of each other in the sales process, and impressed with things the other firm had done. We recognised that both technologies were designed to solve the same set of problems for the same set of users but developed different areas of expertise. By bringing our offerings together, we were able to get that full functionality.”
Glue42 was known for having a robust library of pre-built integrations into Microsoft Office Suite and industry tools such as Fidessa and Bloomberg, along with a ‘zero-install’ web app integration platform. Finsemble had a no-code smart desktop designer that improved time-to-value and time-to-market. By marrying these together, the firm aims to deliver the best of both worlds.
“The feedback from existing clients and prospects on both sides of the merger has been overwhelmingly positive,” Schleifer says. “When we told prospects about the merger they said ‘This is great, because we’ve been trying to decide between the two of you and you’ve made our choice a lot easier for us’.”
Both clients and prospects are also keen to know what comes next. Both firms were investing heavily in research and development, some of which will have been reduced through synergies, but Schleifer notes this was not a merger based on cost savings.
“We didn’t let a bunch of people go, it wasn’t about kind of consolidating,” he says. “It was about combining forces in service of clients. With our combined resources, we can build twice as fast.”
In the latter half of this year, new developments are planned. Glue42 was focused on browser-based deployment that did not require a desktop installation, reducing the friction for setting up interoperability.
“We’ve got a new release coming this fall that gets to real parity between desktop and browser. The idea is that you can have interoperability anywhere on any device. So if I’m at home and on my laptop, or I’m at work in front of six monitors or on my mobile device, or I need to connect my mobile device and my desktop together, interoperability can mesh across all of those and I can access my applications, and my interconnected workflows.”
That starts to touch on one of the other themes that the firm will be focusing on next year, which is to bring firms together more easily within the market.
“A lot of interoperability has been focused around application-to-application, but workflows extend person-to-person, both within a firm as well as firm-to-firm,” Schleifer says. “That’s something that clients of ours have been doing with our technology for years, but it will come to maturity in the next 12 months. New issuance workflows, where a trader needs to figure out how many PMs want a part of the allocation, how much they want, with tracking done via spreadsheet, those are manual processes that require a lot of person-to-person communication. And that’s an area where interoperability can and has improved the lives of our clients. The stuff that you’ll see coming from us in the next 12 months is going to take that a step further.”
©Markets Media Europe 2023
