The Gateway to Algorithmic and Automated Trading

The third way

Itiviti : Katarina Klangby - 4th December 2014

The opinions expressed by this blogger and those providing comments are theirs alone, this does not reflect the opinion of Automated Trader or any employee thereof. Automated Trader is not responsible for the accuracy of any of the information supplied by this article.

Tbricks invented the app-based trading platform to give clients the tools they need to seize new business opportunities before their competition. This is achieved through a unique combination of buy and build strategies, described as "The third way" in a recent article in Best Execution. Jonas Hansbo, CEO of Tbricks discusses how in difficult conditions, buyside firms can control their trading operations and remain competitive:

What in your opinion are the key challenges facing the buyside today?

We are now starting to see global markets recover from the protracted weakness endured since the credit crunch of 2008, but market practitioners have returned to the fray to find a much tougher landscape than before the crisis. Tougher market conditions allied to a constantly changing array of regulations are adding complexity to already complex markets. In this environment it is imperative that you control your costs otherwise you cannot remain competitive.

How does this impact the buyside's trading systems?

Given this set of market circumstances, what's emerging is a requirement for agile, cost-efficient and compliant trading platforms that are flexible enough in design to allow a rapid response to emerging opportunities while avoiding over-reliance on a single supplier

In the current environment of squeezed margins and cost pressures, what should buyside firms do with their legacy systems? What happens if they cannot afford new systems?

The ability to act upon change, faster than the competition, is the very nature of trading. In today's fast-moving markets, a closed-source, rigid trading technology can actually prevent a business from capturing new trading opportunities. However, implementing new functionality in such platforms is a major undertaking, and not only can upgrading take months but often advanced traders prefer to add new functionality at their own pace, rather than leaving such strategic decisions to an independent software vendor (ISV). These are some of the reasons why historically many banks have opted to build their own trading technology rather than buying from an ISV.
At Tbricks we enable a different approach, based upon the assumption that active market participants - such as traders and market makers - will always discover new trading opportunities before any software company. As a result, in addition to a complete trading platform, we also include innovative tools to help market professionals unleash their creativity. All business logic is delivered as separate apps along with complete source code, so our clients are completely in charge of their trading, while enjoying the benefits of a class-leading core platform. Clients use Tbricks' trading apps out-of-the-box, customise them, or build proprietary apps using our apps as a blueprint. The result is a modern trading system with extremely high levels of performance, flexibility and agility.

If they have no choice but to implement new systems to stay competitive, what is the better route to follow - buy or build or is there a third approach?

There is a third - buy and build! With traditional trading technologies, change is slow, painful and often subject to the ISV's release cycle. Implementing new functionality is messy, and upgrading to the next version can literally take years. No-one feels comfortable with placing their future in the hands of their ISV's product management team, so this is why many banks choose to build their own trading system rather than buy. And that has always been the question: to buy or to build?
We believe our clients are always the best and fastest at predicting market trends, so the company decided to make the 'buy vs build' debate redundant by offering something different; a system that separated the core system from the business logic. That way, we could focus on delivering a state-of-the-art system, with optimised performance and powerful trading apps, to those who wanted an out-of-the-box system.
By delivering all apps complete with source code, we can also greatly improve time-to-market for those who wish to customise the system. Tbricks is a platform for the tech-savvy trader who needs to build complex algorithms and trade at high speeds.

What makes your offering truly innovative, and different from other vendors?

First off, our trading platform is ready to meet all the requirements I've mentioned out of the box. All functionality is available and ready to use on Day 1. This allows clients to take advantage of market opportunities straight away. More importantly, though, because all functionality is delivered as apps, customers are able to make the platform their own immediately.
In the same way iPhone users can customise their phones with their personal choice of apps, our clients can start building their own unique sets of functionality by adding and modifying apps to suit their needs. By freeing developers to build their own apps in the Tbricks environment, the platform is just the starting point to unlocking new capabilities, to better respond to market situations as they emerge and help differentiate from competitors' offerings.

Who do you see as your competitors?

We have competitors on either side: the ISVs for off-the- shelf-functionality and the platform solutions or in-house systems for custom-built solutions. There is no true competitor that covers the full spectra, from the market access layer to the end-user layer.

What major impacts will be wrought on the buyside from the current raft of regulation over the next five years, and how will your firm help buyside clients meet these challenges and leverage the opportunities?

Financial organisations will have to satisfy a wide range of internal and external stakeholders in the area of regulatory compliance, with initiatives such as ESMA, MiFID II and MAD II placing new requirements on trading technology, including high levels of control, transparency and traceability.
Tbricks provides key features to help ensure compliance, including auditing, role-based access control, static and dynamic pre-trade risk limits, parameter contexts, hierarchical throughput limits, centralised authentication and real-time risk management.
In close co-operation with our clients' compliance teams, the regulatory bodies and exchanges, our team of expert developers stay abreast of ongoing regulatory change, building new functionality to meet emerging requirements as they come to market. As a result, users never need to worry that their trading platform isn't compliant with new rules and regulations across all the markets they trade in.

Article in Best Execution

Total 1079 words