Jock Percy is CEO and Founder of Perseus
What were the major themes of your business in 2015?
In 2015, we saw a great focus by institutions on saving money. With the squeeze on trading profit margins and the increasing cost of meeting new regulatory requirements, firms are looking to cut costs while maintaining and even increasing efficiency. At Perseus, we focused on outsourcing - providing the technology and infrastructure requirements that our customers need, enabling them to focus on generating revenue. This took two main forms in 2015.
First, with on-demand software-defined networks (SDNs) which offer access to connectivity on what is effectively a ‘pay as you go’ basis, globally and at a flat rate. This technology enables customers to connect to new clients in hours, thus reducing time to revenue as well as significant cost spent building and maintaining their own infrastructure. The massive disruption has prompted commentators to describe it as the 'uberisation' of capital markets connectivity.
Second, we have seen a growing trend towards offshoring trading operations in jurisdictions where regulatory environments are not so onerous – for example, Hong Kong, Singapore and other Asian financial centers. Due to the effort and expense involved with relocating trading operations, it is mostly the larger institutions that have gone down this route to date – but that doesn’t have to be the case. Managed services providers can offer the technological and logistical support to enable organizations of all sizes to trade in new markets quickly and economically.
What are your expectations for 2016?
There have been many demands on institutions to meet on-going regulatory requirements – and these will continue into 2016 and beyond. Technology can play a key role in enabling institutions to comply with some of these regulations and drive bottom-line profit.
Additionally, I foresee continued investment in emerging markets in 2016, despite a somewhat bumpy ride through the previous year. Continuing improvements in the trading market infrastructure of countries such as Chile, India, Mexico, Peru, South Africa and Turkey means that US and European institutions will want to invest in updating their own trading technology platforms so that they can trade efficiently in these markets. Furthermore, the exchanges in mainland China and Hong Kong are steadily expanding and the linkage between them is getting stronger all the time.
Fortunately, developments in fintech are making it easier than ever for traders to operate in remote markets, with the ability to quickly and cost-effectively set up trading operations in country without the operational burden or tax impact of hardware ownership. Additionally, with the option to move that spend somewhere else if things don’t go to plan, traders have more flexibility than ever before.
While it is possible to predict some trends for 2016, the markets will inevitably provide their own surprises. Given how rapid the pace of change has been in recent years, one thing that we can be sure about, is that we will see some very exciting fintech developments over the next 12 months. Watch this space, stay thirsty for knowledge and be prepared. #speedmatters
Featured image by H/Dollar Photo Club