REDI Global Technologies, a company that was spun off from Goldman Sachs together with its REDIPlus execution management system, is building its franchise around the theme of openness, according to CEO Rishi Nangalia.
“Openness is a core tenet of our business, and as such we are actively working to collaborate with the industry,” Nangalia told Markets Media. “We are in the process of finalizing several interesting partnership agreements with other vendors, which will allow us to provide clients with a more effective solution than any one vendor can.”
In 2014, REDI integrated InstaQuote, an EMS it acquired from Bank of America Merrill Lynch as part of BaML’s equity investment in REDI. Clients of InstaQuote have been migrated to REDIPlus, increasing the firm’s client base and growing the platform’s capabilities. REDIPlus now offers a full suite of middle- office services, including deeper integration with a number of clearing and prime brokers and expanded risk management capabilities.
“From a product perspective, we're broadening the spectrum of capabilities and functionalities that we can offer to our clients in the middle office and back office, as opposed to just what REDI’s historically been good at, which is the pure execution and at-trade part of the life cycle,” said Josh Schubkegel, REDI’s chief technology officer. “We are getting more into that OMS capability set, whether it's pre-trade and portfolio management or more of the middle office and back office. You're going to continue to see a lot from us in that space and making investments there.”
The company has also built a set of open APIs and a software development kit to allow efficient integration by other brokers or third party vendors. InstaQuote was fully integrated in only three months using this SDK, which Schubkegel views as a powerful use case for the benefits of REDI’s open model.
“In many ways 2014 was about continuing our evolution as an organization to become the open, transparent and industry-backed fin-tech company we want to be,” Nangalia said. “And we’ve accomplished this without impacting our core client franchise. REDI’s a totally different than what it was even 2 years ago.”
The company now includes an amalgam of people with technology and finance backgrounds, from both the buy-side and sell-side. “Not just from inside the industry, but also people from outside the industry, places like Amazon, Google, Red Hat and other high-tech shops as well,” Schubkegel said. “That's a key part of our strategy —bringing in folks from outside of the industry who have ideas on development and testing processes that differ from what you’d historically find in the financial services space.”
Thematically, the industry is in “a finding-its-footing but stable mode,” said Nangalia. “It's not growing explosively like it did in the early 2000s, but it's also not going through extreme volatility that it went through in 2008, 09, and 10. Instead we seem to be adjusting to a new normal where firms adopt a laser-like focus on their core competencies”
This new normal is suited to REDI’s business model, which Nangalia characterizes as one in which “we provide the open platform through which partners can continue to offer the services and products where they have an edge, and let us or other partners provide the more commoditized aspects where scale is the name of the game.”
Frankly it’s a very collaborative approach that we’re hoping to usher in. This was unheard of in our industry only five or ten years ago, but with new regulatory demands, cost pressures, investor expectations and so on this is a model that we think you’re going to see more and more of.”
Schubkegel agreed, characterizing the industry “as being in a transformational period, where a lot of the things the sell-side handled in the past are shifting to fin-tech companies like us. And ultimately, that makes everyone in the ecosystem more efficient and allows all of us to provide clients with better, more cost effective solutions.”