Opening Cross: Disrupt or Die (Or Rather, Prepare to Be Disrupted)
Disruptive technologies can bring direct and indirect advantages, if you embrace them.
One such disruptive force profiled in this week’s issue is Airex, a provider of an online marketplace of third-party content that the vendor says “democratizes” access to information and tools, and which Interactive Brokers is using to build a co-branded marketplace of content services that its institutional and retail clients alike can access, and which will complement—and perhaps ultimately dwarf—its own existing Investors’ Marketplace portal of third-party content.
Airex’s model is not to be an aggregator, but rather a storefront from which traders and investors can choose research, trade ideas, analytics, and so on. And while that’s a relatively new concept in the capital markets, it’s one that most people are already familiar with on a daily basis—think Amazon.com or iTunes.
“I think that for the long-term foreseeable future, there will continue to be a market for the large, monolithic terminal businesses. I don’t see these going away anytime soon or ever. However, while Bloomberg, for example, has around 325,000 terminals, that’s still a tiny fraction of the global demand for financial information,” says Airex chief executive Stephen Kuhn. “What Airex does is eliminate the fixed cost of sales, so it frees up supply and demand… and gives even the smallest investor a user interface with one username and password to access everything. It democratizes supply and demand, just as every other industry—books, music and travel, for example—has already been disrupted. The financial services industry has not yet reached that level of disruption and efficiency.”
This isn’t entirely true, insofar as the retail financial services industry actually has undergone disruptive change. It’s far easier now for the average investor to get their hands on data and analytics that were once reserved for trading floor professionals, enabled by the proliferation of relatively high-performance mobile computing devices and the app store model of information dissemination and consumption.
However, in capital markets, this level of plug-and-play data access is still some way off, though the key foundations have been laid and forward-thinking architects are now figuring out how to take the next steps—one of which may be more widespread adoption of the OpenMAMA open-source middleware initiative, which will make it easier for firms to deploy vendor-agnostic, best-of-breed data infrastructures that allow them to splice together whatever data sources they want, rather than the ones their platform ties them to.
Am I saying that we’ll see legacy on-site market data platforms disappear entirely? Like Kuhn, I think this is unlikely for the forseeable future, especially since there is so little competition in that area. However, since competitive advantage is increasingly determined by what intelligence you can derive from data rather than how quickly you can get it from one point to another on your infrastructure, there’s no reason to cling to your on-site platform unless you’ve achieved some top-secret, game-changing goal with it. So why not shift it to run remotely, or in the cloud, or on a utility basis, leaving you free to focus on real areas of competition?
Disruption is always a tough sell: ask companies like Xignite, who have led the way on new models for market data distribution, having to carve out specific use cases on its way to achieving more enterprise-level uses, such as its new CloudStreaming service. But when given the choice, why not embrace disruption, rather than resist it? After all, when was the last time a taxi ride gave you a competitive advantage?
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
S&P debuts Spark Assist genAI copilot, draws up ‘Blueprints’ of combined datasets
S&P’s Kensho subsidiary has rolled out new emerging tech products leveraging AI to explore and combine the vendor’s wealth of datasets to solve common use cases.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Waters Wrap: Open source and storm clouds on the horizon
Regulators and politicians in America and Europe are increasingly concerned about AI—and, by extension, open-source development. Anthony says there are real reasons for concern.
Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs
Joseph Lo, head of enterprise platforms at Broadridge, joins the podcast to discuss AI tools.
Man Group CTO eyes ‘significant impact’ for genAI across the fund
Man Group’s Gary Collier discussed the potential merits of and use cases for generative AI across the business at an event in London hosted by Bloomberg.
BNY Mellon deploys Nvidia DGX SuperPOD, identifies hundreds of AI use cases
BNY Mellon says it is the first bank to deploy Nvidia’s AI datacenter infrastructure, as it joins an increasing number of Wall Street firms that are embracing AI technologies.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Nasdaq reshuffles tech divisions post-Adenza