Taking the coveted prize of best newcomer in this year’s Buy-Side Technology Awards is S3 Partners, which impressed the panel of judges with its Blacklight offering. Robert Sloan, founder and managing partner at the firm, explains to James Rundle what Blacklight does, how it aims to solve a critical issue for markets that don’t have standardized foundations, and how S3 is looking at the automation of regulatory compliance in the future.
This marks the first entry into the winners’ circle of the Buy-Side Technology Awards for S3 Partners. So, in keeping with the “newcomer” theme, perhaps you could tell me a little bit about the company and your flagship offering, Blacklight?
Robert Sloan, S3 Partners: At S3 Partners we do two things: We create time, and we create capital-efficient relationships for long-only and hedge fund managers. Both of those clients have a problem with getting data in an acceptable format, so that they can actually use it when they want to use it. So for us, the acronym SaaS means four things in addition to its traditional meaning of software-as-a-service. The standardization of data as it comes in is an important area—it’s a highly fractured environment for information, so you have to standardize it. Then you can use your technology—you can action it, you can analyze it, and you can solve for things that are meaningful to the business.
Picking up on the fragmentation and standardization issue, what are the types of data that are being pulled into the platform?
Sloan: If you go back in time, in equities trading you had the FIX protocol, and that’s really where equities technology started, because there was a way to standardize information, and to pass it back and forth. In the prime services, custody and swaps worlds, there just isn’t a similar level of standardization.
You have to do that first before you can pull your technology and your algorithms in, to make the data do what you want it to. In terms of what data comes into the managers using our software, it’s in a variety of formats, and it’s totally disparate. It really is messy. We normalize it and optimize it, so that they can actually use it.
This is a highly competitive space of course, with a number of different firms attempting to tackle the issues that you just mentioned relating to data complexity and standardization. What do you think sets Blacklight apart from the pack?
Sloan: It’s quite unusual for firms that specialize in software-as-a-service to have service professionals with deep domain experience, as well as the sophisticated technology itself. Our people have solid backgrounds in the industry, and they know what they’re doing. The combination of both, which we have, is a winning one for our clients.
Winning the best newcomer category is obviously a great start, but looking ahead, what’s next for Blacklight and S3 Partners over the coming year?
Sloan: We’re going to be introducing ways in which we can begin automating regulation. Regulation occupies an incredible amount of time and creates inefficiencies for our clients. We’re going to automate a lot of the regulatory development so that it can actually be used as a tool to enhance profitability and enable time creation for business professionals, rather than act as a drag on both. W
“It’s quite unusual for firms that specialize in software-as-a-service to have service professionals with deep domain experience, as well as the sophisticated technology itself. Our people have solid backgrounds in the industry, and they know what they’re doing.” Robert Sloan, S3 Partners
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails