Bob Santella is Chief Executive Officer of IPC Systems.
What were the key theme(s) for your business in 2022?
The key themes stem from the future of trading and the tools required to support it. For instance, the impact of regulatory and technological developments that have driven a greater embrace of trading technology, workflow automation and enhanced digital workflows on trading floors. Then there are new working practices that developed during the global pandemic. The search for alpha – in new and emerging asset classes such as ESG and crypto – also remains key for the buy side, which drives the sell side.
The potential that unlocking voice and other alternative data can unleash. Restructuring this data and combining with other sources of data on the trading floor and other financial applications, can potentially provide firms with improved market pulse and sentiment analysis capabilities; underpin further transformation of the trading workflow; and enable improved decision-making and greater productivity in the trading and compliance environment. Scaling in the subscription economy that is transforming the way in which we consume services. Firms that adopt a subscription model for their technology and infrastructure can experience drastically lowered barriers to entry, along with reduced set-up costs and time to market.
What was the highlight of 2022?
2022 was a very big year for our pioneering portfolio of industry-leading solutions with a focus on cloud and data. The legacy model of a premise-based trading communications system are driving more and more firms to switch to cloud communications solution. Connexus Unigy offers a reduced-risk and efficient way to move firms’ voice trading communications into a dedicated private cloud environment. It unifies voice trading and compliance with integration capabilities that works seamlessly with current and future hosted and cloud-based applications. The result is a full mission-critical communications and collaboration service giving clients easy access and full control of changing trading communications requirements. In our post- pandemic world, the traditional trading work model has changed inexorably and permanently. We are enabling this change, with reliable, secure, “anytime, anywhere, any device” access to trading counterparties, liquidity sources, and transaction lifecycle services.
What are your expectations for 2023?
As we enter 2023, technology in the capital markets will continue to be a critical facilitator. The current and future landscape will demand uninterrupted delivery of mission-critical communications solutions to facilitate trader productivity and operational efficiencies. Traders will again seek to enhance their digital resilience and prioritize unified communications across channels and infrastructure flexibility, seeking more nimble ways to leverage new technologies through ‘as a service’ models that don’t require huge capital investment in, or change to, internal infrastructures, or hordes of dedicated resources, but give them efficient access to the best of the best technologies and services, with subscription or ‘consumption only’ payment models.
What trends are getting underway that people may not know about but will be important?
The shift towards cloud-based, on-demand services as well as data-driven and API-driven environments will hold significant influence in the upcoming year. Cloud adoption acting as a gateway for “revolution technologies” like big data, enhanced automation techniques, distributed ledger technology, and AI / ML – bringing with it all the corresponding benefits in terms of digital transformation.
What industry trends have been prominent but are now fading (or will soon fade)?
The recent buzz in financial markets is, of course, around burgeoning crypto/digital assets and the opportunities it creates. There is no suggestion that this is a fading trend – far from it – but there is no doubt that there will be increasing distinction between crypto/digital assets from an investment (or speculative trading) perspective and the opportunities presented by underlying technologies like blockchain/distributed ledger technology (DLT). Going forward, we would expect the hyperbole around crypto ‘winters’ etc. to be replaced by more considered narrative around the benefits and opportunities arising from bridging the institutional gap between Tradfi and Defi. This is something we are particularly keen to promulgate with our target audiences and in the broader financial community.
What are your clients’ pain points and how have they changed from 1 year ago?
Clients’ pain points do not change with respect to continuous demand and business pressure to do things ‘better, faster, cheaper’ in terms of physical presence and resources, trading infrastructure and communications technologies. What does change are the technologies and channels through which they connect and access financial and capital markets.
Regulatory, market and technological changes, as well as the rapid growth in the number and types of market venues and participants are a major challenge for all participants in the trading supply chain.
Adaptability, resilience, and time to market are key influencers of change. On the sell side, participants such as market makers, liquidity providers and broker/dealers will continue to demand reliable connectivity and the lowest possible execution latency with multiple, global liquidity venues. The buy side, including hedge funds, funds of funds, and proprietary trading firms will remain focused on innovative strategies that maximize potential returns while simultaneously optimizing operational efficiency.
In an increasingly competitive environment with new non-traditional financial markets players entering the fray, and continuing technology innovation such as cloud networking and DLT, it becomes more difficult to keep abreast of changes. The key to continuing success for market participants in today’s rapidly evolving, technology-driven, highly competitive trading environment is how well they can bring together multiple evolving technologies, platforms, and channels.
By leveraging managed services models, firms can deploy and execute sophisticated cross-asset class trading strategies at pace, with rapid market connectivity, enabling them to realize speed-to-market benefits and to optimize returns. There’s also a ‘rising tide lifts all ships’ benefit since ‘as a service’ performance enhancements, security safeguards and other products and solutions introduced by service providers benefit all managed service users.
