2020 was a year unlike any other. Despite our worst fears, many organizations were able to respond quickly and deal with change. In some cases, we managed to improve business communications despite the demise of the traditional office setting. To illustrate these points, we gathered insights from renowned fintech experts and are pleased to share their thoughts here:
“The pandemic has rapidly accelerated digitisation across a number of industries, but none more so than banking. Last year we witnessed a huge shift in consumer behaviour as more people signed-up for digital banking for the first time in response to social distancing. While Fineco has always been a digital-first bank, this change caught many traditional banks off guard – particularly their IT infrastructure which had to handle record-breaking levels of online activity.
2020 confirmed to the banking industry something that Fineco was already aware of: Banks must strike the right balance between digital and human interactions. Challenger banks must provide the real-life human touch when it comes to service delivery. As well as this, consumers are looking for greater convenience in the form of integrated offerings. By offering banking, investing and trading all on one low-cost yet highly reliable platform, Fineco is offering its customers a ‘one-stop-shop’ where they can have easy access to a range of online financial services
Finally, last year demonstrated the growing importance of ESG and we have responded to this new consumer demand. As a result, Fineco has added more sustainable fund offerings to its investment platform, and we are proud to have recently signed the UN’s Principles of Responsible Banking as part of our ongoing ESG commitment.”
“Not so many lessons learned but something beautiful that has come out of 2020. I am a strong advocate of cross-team collaboration and particularly between the business and technology in order to achieve shared visions and goals. Ironically, we have all been physically distanced in 2020 but virtually we are collaborating more than ever, not just between clients and vendors but vendors with their partners as well as other vendors and that has been amazing to see and I believe the trend will continue through 2021 and I hope it is here to say.”
“2020 was the catalyst needed to propel the financial desktop revolution into another gear. Traders working from home, where the solution to screen real estate issues caused by closed, proprietary applications, could no longer be practically solved by just adding more monitors. Interoperability of best-of-breed applications is no longer a nice to have; it is the future, the financial desktop, where the trader experience takes a leading role.
The need for highly scalable systems, with flexible automation capabilities, became even more important during 2020. The world changed almost overnight, which meant traders needed to adapt quickly, in a fragile, volatile situation. Traders with the ability to build automation rules on the fly, without any development, ensured they were never wasting a click.
Alternative data sets truly came into their own in 2020 – raw market data is no longer enough, both from a real-time trading decision perspective, and post-trade analysis. The market context and global situation we saw throughout 2020 and continuing into 2021, cannot realistically be compared to historical trading conditions without careful consideration. Ensuring all relevant data is available at the point of trade, we saw an emphasis put on APIs, and maintaining a flexible, open architecture.
And of course, there’s the unstoppable rise of crypto!”
“Over the last 12 months, we’ve seen a major shift across the institutional trading landscape as traders were forced off the traditional trading floor and into remote working conditions. While the pandemic has been a catalyst, it was not the sole driver of this structural shift. Voice trading and mobility remain prominent factors in the institutional trading ecosystem but they must be supported by secure and reliable cloud infrastructure in order to access the ‘virtual trading floor’ that is quickly becoming the new normal.
Many firms realized at the outset of the pandemic that they lacked the resources to adequately capture voice data because they had been relying heavily on antiquated technology. Cloud9 quickly stepped in with our cloud-based voice communication APIs to ensure greater flexibility and interoperability, regardless of where they were located, ultimately leading to a 50% increase in our business.
In an industry that’s becoming increasingly digitized, productivity should not be impacted. In fact, we’ve learned that firms can even elevate efficiency by leveraging the right resources, from front-office trading software to regulatory and compliance solutions. We expect that trend to continue this year but it starts with creating a more nimble, cloud-based environment for individuals on and off the trading floor.”
“I think there are three main lessons to be learned. The first was just how resilient capital markets remained both in terms of their systemic functioning and how firms were able to put into place remote working for their trading and support teams. That said we are now witnessing a period of creative destruction as firms look for new ways to be successful. This will drive a “K shaped recovery” as business models that can demonstrate strategic agility rapidly outpace those that were outmoded anyway (even pre pandemic). The adoption of cloud-based technologies and the use of web-based front ends are part of this overall drive towards data centricity. This leads to the third lesson – that firms are realising that their trading platforms are out of date architecturally and have accumulated significant technology debt. It is unrealistic, however, to expect these systems to be replaced wholesale and so, instead, we are seeing a steady growth in desktop and server interop projects. These use contemporary technologies such as Mesh Application Server Architecture (MASA) to bring the API economy into capital markets. The net effect is that technology will be better able to bend with evolving business needs rather than the other way round.”
“One of the biggest lessons that every industry learned in 2020 is how to be more to their customers. In a year where it felt like everything changed, the more you could support customers and provide simple solutions, the better off you were.
Financial institutions are some of the most trusted organisations we interact with. We literally give them the keys to our financial kingdom. But with this trust comes a great opportunity for financial institutions to expand the services they offer. They can also capitalise on the trust they have built to help customers outside of just managing their money.
In addition to the extenuating circumstances of 2020, another factor driving banks to expand their services is open banking. By opening APIs, banks can become a one-stop-shop for a range of data-sensitive services, from insurance and business management tools, to art appraisals and investment management.
The idea of expanding into new verticals is hardly new, but the key for this evolution of the sector lies in banks’ appetite for risk and willingness to reinvent their business model.
They must abandon preconceived ideas about hoarding data and avoiding oversight. Instead, they should embrace transparency, run towards regulation and take advantage of opportunities to collaborate with outside firms.”
“Central to the strategy here at Iress has always been to “Put the client first”, but 2020 put this strategy to the test in ways that could not have been anticipated just a few months before.
With trading volumes quadrupling in some clients, staff working remotely, and Brexit to plan for, new client installations and planned migrations would certainly be harder than expected. However, by listening to our clients, adapting to their new working environment, resources and timelines, projects were brought in as planned.
Whilst flexible technology undoubtedly played its part, it was only really a piece of the puzzle. Forcing in a complete workflow platform, without adapting it to the client’s environment, would have been a wasted opportunity for improved efficiency. Many factors must work together to improve the overall trading experience. Firstly, a system should have flexible APIs, enabling integration with internal systems and data and interoperability with other vendor platforms. Secondly, a good degree of configurability to support unique workflows. Finally, for us and our clients, employing the right people who have a good understanding of the clients’ business, issues and future direction, and a flexible approach to remote implementation is key.
In the end, strong technology coupled with a strong vendor/client relationship was what made 2020 a success.”
“In what was a very turbulent 2020 and with, particularly, the everyone-at-home situation, it is not surprising that innovation, collaboration, and productivity were front of people’s minds. On the face of it, Adaptive benefits from any increased urgency and appetite for digitization across the finance industry – which 2020 drove dramatically. But as a firm that specialises in delivering large, complex trade execution platforms where our clients expect innovation and collaboration, and of course high productivity, we’ve taken specific steps to ensure our standards don’t slip across each of those areas in turn.
There has been a reduction in innovation caused by fewer opportunities to meet people and establish new relationships within and outside of an organisation, reducing innovation. Collaboration is the most obvious concern, and the impact is most keenly felt when new initiatives are kicked-off; team-bonding can be more labored and less impactful. Finally, we are thinking about productivity, as more hours spent working and less spent commuting do not always result in higher quality output. Specifically, for Adaptive, proximity to our client stakeholders is key to delivering the right solution as efficiently as possible, and being fully remote presents an additional challenge.
We are keenly aware of these issues and have been steadily putting measures in place to mitigate them. There will almost certainly not be a return to the “old way” of working and we are optimistic about striking a new balance to come out the other side with improved methods and solutions.“
This brought our team closer together, which had a direct positive impact on the quality of support we provided our clients during the pandemic. It was an uncertain and unsettling time, and we realised that the need to work remotely presented a risk of team members feeling disconnected and anxious.
Our team’s wellbeing was our top priority, and that went hand in hand with ensuring our platform remained stable – giving our clients the confidence that their operations will continue to run smoothly and be able to cope with market volatility.
As the pandemic crisis unfolded, we held regular online meetings to keep our team connected, provide peace of mind, and reduce feelings of anxiety. This included a weekly company-wide meeting, where we spent a short time on business matters, including updating the team on the stability of our business, and the rest was open for the team to share any concerns, personal wins, or just casual conversation.
We also learned to accept less than perfect, but not to compromise on our core values. Our message was: we are all in this together and play an important part in keeping financial services (and thus our economy) running. With this common purpose, our team was motivated to continue delivering high standards for our clients, which in turn provided stability and certainty for our company, team, and their families.
“Our technology played an important role in ensuring the continued operation of New Zealand’s wealth management services during the pandemic. Our platform Myriad manages over NZD 40B of assets, so we have to be prepared.
Thanks to the robust infrastructure, systems, and processes we had in place, and the continuous refinements we had made to our software over the last 30 years, we were able to adapt quickly to the changing environment. This enabled our clients to scale with significant 300% increases in trading activity during March and April.
We saw our role as being a source of stability for our clients – to give them confidence and surety in their operations, so they could focus on helping their customers retain their financial wellbeing.”
“In 2020 I had the great honor of interviewing over 100 leaders and entrepreneurs from Fintech companies across the world on our YouTube show and podcast series Fintech Focus TV. The lessons were plentiful but what particularly stood out were the lessons in leadership. Those that focused on clear, concise decision making excelled, those that procrastinated suffered. Those that make an art of clear, regular, and honest communication thrived, those that failed to do so saw attrition. Those that trusted their teams and gave them the space to operate shone, those who micromanaged failed. Whilst 2020 was a year of digital transformation that accelerated like no other time, it was the lessons in high-quality leadership that stood out. I was constantly learning from outstanding leaders who showed great kindness, generosity, and compassion to their teams and customers. I loved seeing sales teams pivot to add value and drive useful content rather than push sales. If I were to put the lessons into a simple sentence, they would be lead with candor, over-communicate, trust your team, look after your people, show kindness, and add value. Those that truly committed to these lessons not only survived 2020, but they thrived through it.”
“This past year was a rebirth for TABB Group. On March 13, 2020, we closed operations to regroup, due to Covid’s impact on our business.
In June, we sold the TABB Group subscription research business and simultaneously relaunched our editorial flagship, TabbFORUM. Michael Scotti, former Editor of Traders Magazine and Director at Institutional Investor’s TraderForum, joined as Editorial Director. We have since introduced some new enhancements to our content offering.
Virtual Events: TabbFORUM migrated its “live events” business to the digital-only world. In December, we partnered with AIR Summit to produce “AlphaTech Upfronts”, a FinTech event that attracted over 1,100 attendees and 35 presenting companies. “Fixed Income Trading and Best Execution Summit” is our next virtual event, slated for March and created with our partner Capital Markets Strategies.
Lessons Learned: Embrace change, never stop trying new initiatives and leverage your digital platforms.
Expect more innovation from TabbFORUM in 2021, as the best is yet to come!”
Summary
The key takeaways from the fintech experts recap are:
- Focus customer experience
Firms need the right tools and infrastructure to keep their clients up to date and aware of the support that is available to them. Doing this quickly requires effective governance processes to make decisions fast. - Accelerated digital transformation
Many agreed that technology innovation was needed to deal with remote working patterns. Those who were able to orchestrate new processes from existing applications saw less business disruption. - Invest while you can
Large scale infrastructure projects are complex and risky. 2020 showed that the cost of doing nothing could be very similar.
In the light of these lessons, Glue42 will continue to invest in Gartner’s vision of the composable enterprise and extend that to be relevant to desktop environments where legacy modernization and new applications need to work hand-in-hand – within the office or at remote locations.
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