Asif Godall, head of global markets EMEA, and Lu Fu, head of e-sales and digital transformation EMEA, at Mizuho tell Trader TV how the sell-side firm has rolled out a data-centric service model, by integrating their trading and sales functions, to help optimize voice and electronic-trading workflows for their buy-side counterparts.
Fu says Mizuho’s trading and sales team use this data-driven approach to better understand their client’s decision-making processes and help them improve their execution performance. The bank has further developed real-time analytics to provide live information to the buy side for voice and e-trading.
“..we already have the infrastructure built to provide a lot of live information for trading. So, such as pre-trade information, [or] some of the post-trade analytics to show them in real-time to help them form decisions on the pricing,” says Fu.
Interview transcript
Dan Barnes Welcome to Trader TV, your insight into institutional trading, I’m Dan Barnes. Buy and sell-side firms are increasingly connected via data and digital services, but relationships are key to making these elements work. Today I’m joined by Lu Fu, an Asif Godall at Mizuho to share how their team makes this model work with clients. To start. How do you simultaneously optimize trading for electronic trading and voice when you’re engaging with clients?
Asif Godall So the first thing we’ve done, Dan, is we’ve amalgamated our technology sales and trading teams together and they’re all underpinned by one set of data. So when an inquiry comes through to a trader, they have a ticket that’s enriched with all the data they need to be able to accurately price that inquiry and respond to the client. Some examples could be net buys or sells in that security or financial instrument. What that client has been trading with us in the past, what their market traded volumes have been and other data. But all of that data is accessible to the trading and sales teams together.
Lu Fu And also by the nature of electronic trading is a very data and technology-driven business. So very naturally, we’re trying to approach our clients with data, but also a very client-centric. We are very integrated across our voice sales coverage as well as our e-sales team. So when we go to a client, we’re trying to understand more holistically from clients how they make decisions in terms of where they want to execute, which channel they would use and how many dealers they would prefer to put on the panel to optimize the result for them and also what kind of level they would like to execute. So for us to learn those parameters behind their decision-making process will make Mizuho more relevant to our clients and to using the E trading stats and the voice stats as a door opener for us to bring more business and the more services to our clients.
Dan Barnes And then what impact does that actually have on trading performance?
Lu Fu From the trading perspective, we already have the infrastructure build to provide a lot of live information for trading. So as such, has the pre-trade information, some of the post-trade analytics to show them in real-time to help them form decisions on the pricing. More importantly, we’re also very transparent with our clients on E-trading and on voice performance as well. As I mentioned, it’s very key to learn how to understand their decision-making process, to understand how to measure the dealers, what are the key parameters they use and we’re actually using that as the KPIs (key performance indicators) to align our trading performance.
Dan Barnes Very good. Now what’s the technology infrastructure that underpins your team?
Asif Godall Our digital journey started relatively recently and we’ve been quite lucky in the sense that we didn’t have a big legacy technology stack to have to rewire. So we’ve managed to build from the ground up. And as a result of that, a lot of people that come to Mizuho are quite impressed by how lean and agile our technology stack is. All the data sits in one data lake, as we discussed, and we’re building pricing engines on top of that data lake. As an example, we’ve just built a FX and rates pricing engine, it’s called Maverick. and yes, it is named after Top Gun and it uses that data like to price foreign exchange inquiry onto foreign exchange trading venues, an interest rate swap inquiry on interest rate trading venues simultaneously and seamlessly. The next phase of development for us is going to be using cross-asset data to use cross-asset correlations to make better prices to clients more quickly.
Dan Barnes I mean, how is this model actually reflected in the team itself?
Lu Fu The way we as a firm integrated the technology function, sales function and trading function, I think really diversified the skillsets we have on the trading floor nowadays. That’s also the trend we noticed on the straight across buy said on the sell side. So the way we’re currently building our team is really building the team for the future. We look at a lot of the data analytical skillsets because we know the increasing demand from our clients. But at the same time, because we’re trying not only to unlock the value of the data, but also to present that back to our clients. So the communication skill set is equally important.
Dan Barnes So this is a really interesting model. What are the elements that sit behind it?
Asif Godall So one of the philosophical elements that sit behind our model comes from a Japanese Zen saying, which is in the beginner’s mind. There are many possibilities in the experts mind. There are few. So every time we think about solving a problem, whether it’s how can we make a price or how can we service a client inquiry, we really think about how can we solve that with a beginner’s mind. Our company purpose is innovating today, transforming tomorrow. And that’s how we think about the business.
You’ll often hear the sell-side talk about themselves as a sales and trading business. We describe ourselves as a technology sales and trading business, and the technologists sit with the sales and the trading teams. And as we discussed earlier, the electronic and the voice teams are completely integrated and sitting together. That is all underpinned via one data lake that the sales teams can use for client analytics and the trading teams can use for trading analytics and make better prices to clients.
Another element is that London has always sat between east and west in terms of trade and now sits between east and west in terms of electronic trading. And we really want to use London’s pedigree and access to talent and technology and the clearing systems to connect global markets and global clients together.
Dan Barnes I’d like to thank Asif and Lu for their insights today and of course, you for watching to catch all of our other shows, including Trader TV This week at 6:45 a.m. UK time every Monday go to tradertv.net.
Catch the show each week:
To watch other Trader TV This Week shows go to – Video
Or make sure to follow us on LinkedIn – Trader TV’s LinkedIn
Available as a podcast – here
