Back in June 2016, Waters attended the sixth annual New York FinTech Innovation Lab Demo Day, held at Bank of America’s One Bryant Park offices. One of the eight profiled startups on the day was Madison Avenue-based AlphaPoint, whose platform was designed specifically to help capital markets user-firms to use blockchain technologies to issue, track and trade any financial asset. Like large numbers of distributed-ledger technology vendors, AlphaPoint is just at the beginning of its journey, but the promise of its solution is what most impressed the SST Awards judges, enough to be named as the best infrastructure provider to the sell side for 2017.
The AlphaPoint Distributed Ledger Platform (ADLP) was built from scratch to optimize data throughput and minimize system latency. ADLP, which leverages the Microsoft Azure cloud, has been in active deployment since 2013 and is currently installed at over a dozen “revenue-generating customers,” according to the vendor, including CME Group; Scotiabank; BTCC, a Chinese bitcoin exchange; and Brighton Peak, a Melbourne-based bitcoin exchange.
ADLP offers users a front-office execution platform, a sell-side data management solution, and a sell-side reconciliation platform, and has hosted over 5.3 billion historical transactions to date. It is designed to resolve key bottlenecks so that blockchain technology can be used in the more controlled, more demanding realm of high-performance enterprise environments.
A key differentiator for AlphaPoint is its ability to digitize costly, slow, error-prone and paper-intensive workflows, allowing users to more quickly get up-and-running in new markets, while providing a “golden ledger” of record for any workflow or asset.
This allows customers to find new sources of revenue by better trading illiquid assets, such as over-the-counter (OTC)-traded commodities or securities based on, say, fine art. It also lessens a firm’s need to outsource reconciliation and low-level operational functions. AlphaPoint has also completed a period in an accelerator lab operated by Accenture and sponsored by Goldman Sachs, BlackRock and JPMorgan, among others.
Blockchain is one of the more intriguing technologies to enter the capital markets space in recent years. The technology is still in its nascence, so it’s impossible to tell just how revolutionary it will prove to be. While AlphaPoint still has a long way to go, if it succeeds at its goal, the benefits could be huge for the sell side.
Adam Sussman joins Anthony Malakian to talk about Liquidnet's acquisition of OTAS, machine learning and AI, and what the buy side wants from analytics platforms.Subscribe to Weekly Wrap emails