Speaking to Trader TV from Symphony Communication’s New York offices, Brad Levy, CEO, discusses how he sees strategic technology decisions as critical to tackling financial institutions’ rising cost and performance pressures.
He says there is a shift from product-centric to platform-centric thinking, greater use of data, and incremental progress over “big bang” transformations.
Compliance, however, remains a major challenge, and he looks at where he sees federated communication tools playing a role in developing more secure and efficient tech stacks.
Levy also looks at how best-of-breed technology is fuelling competition, where thoughtful buy-versus-build decisions are required, and unpacks today’s biggest roadblocks to implementing platform as a service (PAAS)-like technologies.
Looking ahead, the CEO shares his thoughts and predictions on how he believes artificial intelligence (AI) and real-time processing will accelerate with broader cloud adoption, and what that could mean for the front office.
Interview
Jo Gallagher
To start off with, how can strategic tech decisions make the biggest impact across financial institutions’ front office performance?
Brad Levy
So what we see are four elements; the first is moving from a product mentality to a platform mentality. So really building platforms where, when you put things on it, they work, and that’s both inside and outside of the firm. So whether you’re building it or looking for partners. Data is the next big part of the puzzle. There’s more data created every year than in the history of time. Whether it’s a click, a transaction, human, you know, ‘what-are-people-doing?’ metadata. So there’s a lot of types of data that are critical to understand their role in the workflow. Maybe the most important thing is incrementalism – so how do you really move in small bits forward without boiling the ocean, and we definitely see bigger wins from a lot of us and our clients based on that incremental view of life, where you move forward in small chunks versus big bang. It’s really the only way the industry moves forward, especially the front office. So I think those incremental projects that tie together over time are really important. And then there’s this mass convergence that’s happening today, where you really do have a lot of technologies coming of age, being refitted, or connecting and coming together; whether it’s cloud, Blockchain, AI, you know, quantum technologies are all coming about – so that convergence of tech is really important to understand as you try to deliver future state platform technologies in the front office.
Jo Gallagher
Where, I guess, are you seeing the biggest performance issues across firms emerge?
Brad Levy
Compliance is a really important one. A front office solution that we have that’s gained a lot of traction is Federation, so connecting to text or WhatsApp. For wealth managers, for bankers, for people in the markets, it’s a compliance issue to be offline. At the same time, you’re actually seeing people really understand the business efficacy of having a federated channel to accelerate and manage their business forward, not just be compliant. Performance pressures are challenging because, you know, you really have to have a long vision and short execution style. You know, I think about it as operating on a patient without anaesthesia, where you have to run these parallel tracks; supporting what’s here today, and moving forward on your new state. It’s not like there’s a stop button. The world changes every day. There’s risk flares in markets, in the geopolitical environment – you just have to factor in that that’s going to happen and definitely puts pressure on all things. A fragmented world, getting more fragmented by the minute, is very challenging on the performance pressure, on what to do and when. But then how do you just get to that key insight that you need? How do you find that settlement that’s failing? You know, we have an initiative in T+1 settlements, where we’ve helped DTCC and Broadridge NYFIX and Taskize find the settlement fail more quickly by introducing real-time communication into their workflows, to really get to a faster settlement exception management, which was creating real performance pressure, both to know you’re compliant with the regs, but also just to get to liquidity more quickly in a world that’s grown up by batch process.
Jo Gallagher
And then where does best-of-breed technology fit into all of this?
Brad Levy
Well, I love the move to best-of-breed because it really creates a lot more competitive juices and gets everybody to level up on innovation, versus everybody just choosing what’s sort of maybe in their stack already. It also drives greater connectivity; when you have best-of-breed solutions that need to work with each other, you need more extensibility, you need more interoperability. Buy versus build is definitely something that you have to think hard about. Am I the best builder of this or should I acquire? Building may make sense, but buying is a bit more En Vogue now, I think. And then there’s even a crowdsourcing element of this. When you go out there and you speak to a lot of folks, you learn a lot – from open source, where you really do work together directly, to just knowing more to be a better buyer or builder is definitely part of this best-of-breed movement.
Jo Gallagher
So what are the biggest roadblocks to implementing these PAAS-like (platform as a service), interoperable solutions? And when do you think we might see some results from these rollouts?
Brad Levy
I think just the rate of change is just so challenging for humans as individuals, for groups of humans, for companies, right? There’s so much going on in the world so quickly, it’s very hard to get a grip on it and know what you need to be doing, because change is happening so fast. When you think about securing things from the tip of your finger to the chip in a data centre, it’s no longer okay just to say ‘it works and I don’t know how’ – you really have to understand where the materials are from that make chips that sit in data centres all the way to the tip of a finger that may or may not be on a device that you understand and can control. That’s very challenging, and that definitely is a roadblock to making sure things are secure when people are roaming the world or pinned to their desk. And then the real-timeification, or this idea that the 24-by-four-and-a-half days a week is now moving to a 24-by-six-and-a-half days a week. How do you get to this real-time processing, real-time settlement, real-time information? And then the bigger challenge, I think ultimately, is when M&A and consolidation happens and does change the perception, or how people can move, whether it’s an investment perspective or just being part of something bigger. So you take all those elements and, you know, I would say AI is the biggest conversation now; we actually are doing quite a bit of what we would call Machine Learning, bots, you know, finding deterministic moments, like, ‘this is clearly a problem, I just need to find it in a sea of data’. We think things like agentic AI and real probabilistic model driven are a little bit out there in terms of a few years, but not too far. The cloud was launched by AWS in ’07 and we’re really still trying to move to that cloud, whether it’s public cloud, private cloud or personal cloud. How do you do that for generic use cases as well as blockchains? And how do you even do that for capital, very specifically, so we’re not in cloud yet. Once we get there, we’ll open up mobility. We’ll open up a lot of AI flows in a way that the user is able to do it on their time, versus having something pushed on them by an enterprise, so, pretty excited about the now real move to cloud that’s been probably building for about a decade.
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