Waters Rankings 2021 Winners' Circle: Bloomberg

One of the least surprising wins of this year’s Waters Rankings came in the best sell-side OMS provider category where Bloomberg TOMS emerged top for the sixth straight year. Victor Anderson chats to Bloomberg’s Phil McCabe about what makes TOMS such a compelling, versatile and consistently relevant front-office platform in a market saturated by third-party OMSs and in-house-built trading platforms.

WatersTechnology: The sell-side OMS market is highly competitive, given the availability of third-party platforms and the fact that so many sell-side firms have developed in-house order and execution management systems. And yet this result shows that Bloomberg has maintained its place at the head of the pack. What is it about Bloomberg and specifically TOMS that makes it such a compelling platform from a sell-side perspective? 
Phil McCabe, global head of sell-side solutions, Bloomberg: For me, what makes TOMS so compelling is that when our customers buy TOMS, they aren’t just buying software for order management or a convenient way to list and order their trades—they’re buying the entire Bloomberg ecosystem. To me, TOMS is a lens that focuses the news, analytics and data that sits within the Bloomberg system, which it bubbles up into the TOMS user experience. When our customers buy TOMS, they’re immediately served by market and reference data, and they have access to tools like BVAL, which provides end-of-day pricing data. All of that can be surfaced in TOMS. Through TOMS, they have access to obvious things like pricing tools and yield calculations, but we’ve also integrated complex things like XVA and tools to calculate mortgage pay-downs, for example. And then there’s the really valuable stuff like the integration of news with pricing tools and the inclusion of legal documents for collateral calculations or customer preferences with respect to how axes are distributed. 

WatersTechnology: What do you see as your principal value proposition to the marketplace? 
McCabe: We are very much aware that this category was voted for by our customers, which is the highest recognition there is. We’re 100% aware of the responsibility that goes with firms trusting us with their trading technology, and we really try to live up to that. Everyone who picks up the phone—who works for me or the engineering teams or for the first line of support—has it absolutely drilled into them that serving our customers is our principle value proposition.  

WatersTechnology: It seems that TOMS has been around the industry forever and yet somehow Bloomberg has ensured that it is still relevant to the sell side and that it has the specific functionality and ease-of-use to solve its users’ most acute challenges, which makes it a highly compelling platform. How does Bloomberg maintain TOMS’ freshness and relevance? 
McCabe: We spend a lot of time listening to our customers and we have a pretty broad view of the market. This is the benefit of being aligned with several different businesses—the data business, the venue business, we serve the buy side as well as the sell side, and we cover risk and regulatory reporting. When you bring all that together you get a broad view of what the market requires, and part of our DNA is listening to customers and delivering the functionality they need en masse. For example, historically we found that people were happy trading on only one venue, but recently they are looking to trade on five or 10 venues. The way people address liquidity is changing and trading venues are proliferating. We’re now connected to more than 40 venues and we bring in the data and aggregate it within the Bloomberg system. One thing we’re especially proud of is the work we did with the China Foreign Exchange Trade System (CFETS) to ensure that TOMS was able to help customers in Asia access and distribute that liquidity to the point now that we have several Chinese banks using TOMS and their trading platform. 

WatersTechnology: I know you prefer to talk about what Bloomberg has done rather than what the business is planning to do, but can you give me an indication of what future developments might be in the offing from TOMS’ perspective?
McCabe: Artificial intelligence is an exciting area right now and everyone is thinking about it. Financial market participants consume and create a lot of data, and one thing we want to do is help our customers connect to that data quicker in order to make better trading decisions. In this respect, native integration of data is very important. For example, if a new bond is issued, the news team know about it first, then the data people know about it, and then the trading systems people, and very quickly the new bond is available in the trading workflows. When it comes to making trading decisions, if a trader has a trade request, they will know what their indicative price is. But if they want to know what the price is at a specific time, they will look at the market, assess whether risk is on or not, look at their inventory to see whether the firm holds the security or not, and consider what the market has been talking about. They will use their experience to make a decision about where the price should be, although probably 80% of the time that experience can sit within a decision-support tree, which means that the information the trader is using to make a decision can be delivered to them at the point of trade. It could also potentially be used as part of a calculation to provide them with guidelines about where the price should be, or ultimately if they want to enable full automation, it can tell them precisely what the price is based on the weighting of each of the factors contributing to the calculation. The really interesting thing about this is that as we understand the data better and as our ability to compute gets ever more powerful, every time we make a decision, we can learn from the previous one.