Big Data Technology for Investor Protection

The future of financial services

L'AGEFI: Monday, February 7th 2011

ANTHEMIS GROUP. The founder of the investment platform was at Lift de Genève to discuss the future of financial trading.

Sean Park, the founder of Geneva-based Anthemis Group, advocates a revolution in the technologies underlying trading services. We are currently going through a period of transition between the end of the industrial era and the start of the information era. We're seeing a change in the value of exchanges, which are wholly digital in nature, he says. The creator of a number of short films plus a blog on financial services reform in a customer centric technological era, Sean Park has over 16 years' experience in the financial industry. He has also served as director of the Markit Group and Chairman of the Board of International Index Company, formerly iBoxx. He also sits on the board of FX Capital Group, along with other trading systems using Web 2.0. My main goal is to identify companies using new technologies to provide end-customers with more intuitive services by reducing the number of middlemen in markets. Without of course increasing the cost for them, he adds.

The core services of interest to Anthemis Group are as follows: trading of all types, resource optimisation, information storage, information transfer and the reporting generated thereby. The key ingredient in all these services is nevertheless customer trust. And this is something most banks don't have these days, he continues. In his opinion, the key elements underpinning the revolution in our access to financial services are also based on the optimisation of the cost of these services. Notably thanks to cloud Computing, EaaS (Enterprise as a Service) or SaaS (Software as a Service) which is not a technology but rather a distribution method. Making software available as web services seems to represent the future of distribution, leaving behind the ASP model, which in the view of some experts is often still just thrown together. Unlike SaaS, the ASP model hosts the server component of a client-server application. The ASP model thus perpetuates the fading tradition of proprietary services exclusively dependant on a fat client, which is also proprietary. It should nevertheless be noted that some already well positioned market players, such as SWIFT, are also making efforts to cut transaction costs. A SWIFT 2015 programme driven by Yawar Shah, Chairman of the Board, and Lazaro Campos, CEO since 2007, was presented at the SIBOS conference in Amsterdam in October. This plan includes a restructuring of the costs incurred by customers, better segmentation thereof, as well as a plan to strengthen internal finances, designed to win back the trust lost over the past number of years. With financial volumes down 2.4% in 2009, Yawar Shah noted that these measures represented major changes within the company. Another important component are the trading platforms. From Facebook to Betfair and NYSE EuroNext, Sean Parks sees a place for all the platforms. The US start-up Metamarkets, represents in his view this transition to the era of Web 2.0 trading platforms. The infrastructure developed is designed to improve the transparency of media prices on the Internet. Metamarkets is looking to empower these global companies who are overwhelmed by the velocity, granularity and quantity of transaction data they generate, explains David Soloff, CEO of Metamarkets. And then finally there is digitalisation. Building on the work of such theorists as Ronald Coase and Herbert Simon, Sean Park is looking afresh at cost optimisation concepts and adapting them to the digital era.

Innovation and business models can now be based on other sources of expertise and financing thanks to crowd-sourcing or the concept of open innovation. Beyond this can be found models that are based on digital platforms, APIs (application programming interfaces) and, of course, end products such as applications and services. Models based on physical platforms should not, however, be neglected. This new dimension simply offers economies of scale and the ability to create new ecosystems that bolt on to existing markets, notes Sean Park. In other realms, the founder of Anthémis points to the arrival of BaaS (banking), PaaS (Payment), RMaaS (Risk Management) and FXaaS (Foreign Exchange), thanks to a multitude of small new players. He in particular mentions Blueleaf and BankSimple as examples of companies targeting these segments. In Switzerland, Dukascopy and CFinancials are also good examples. The future of financial innovation is based on the development of APIs.