Open Source, Cybersecurity, Fintech Relationships: A Look Back at the North American Trading Architecture Summit

Dan gives a recap of WatersTechnology’s biggest sell-side focused conference in the US.

A crowd with raised hands

Another Waters conference has come and gone, and yet again I’m left with plenty to chew on. The North American Trading Architecture Summit (NATAS) is particularly special for me, as it’s geared more toward the sell side.

This year’s conference did not disappoint, as our conference producers did a fantastic job of getting some of the brightest minds in the industry to speak on a variety of topics. I’m going to highlight some of the ones that really jumped out to me, but if you’re looking for a complete rundown of the day, be sure to tune in to keep eyes on the Waters Wavelength podcast, as US editor Anthony Malakian and I will break down the entire event.

Giving Back to Open Source

NATAS kicked off with one of the better keynote presentations I’ve ever seen, as Jim Adams, global markets CTO at Deutsche Bank, discussed the benefits of open source and the need for banks to contribute to communities.

Open source holds a special place in my heart, as I wrote a feature on the topic about a year ago. In the story, I mentioned the conundrum that open source represented for banks. While they enjoy the benefits of getting innovative software for free, they’re not willing to give back to the community for a variety of legal and compliance reasons.

It’s an interesting issue, and I see both sides of the argument. On the one hand, if you’re eager to take software from open-source communities, you should also be willing to give back to help it grow even more. What makes open source so valuable is the number of users constantly contributing to the project.

That said, banks have certain standards they need to uphold to protect themselves. And while it might be easy for Developer XYZ to contribute to an open-source project, it’s a lot harder for a massive firm to just freely submit code.

The potential middle ground, which was mentioned in Adams’ speech and my story, is to create foundations to which banks can donate code, which will then in turn be contributed to open-source projects. For the time being, this seems to be the best route forward, but we will see.

Cybersecurity Still a Top Concern

When I first started at WatersTechnology back in 2014, it seemed like not a day went by without at least one mention of cybersecurity. And while that trend seems to have died down a bit, it’s still clear that issue is top-of-mind for C-level technology executives.

All the speakers on our C-level panel mentioned cybersecurity when asked about their biggest priorities over the next year. David Kelly, partner, co-COO and CIO of Pine River Capital, mentioned his firm’s use of behavioral analytics to surveille employees’ tendencies.

“We’ll just look for abnormal behavior. If we have a trader and we’re logging everything that they are doing on their desktop or on their remote tools, maybe that trader would launch the order management system (OMS) 12 times in a week. Well, if that same trader opens the OMS 80 times in a week, that’s abnormal, and that might be of interest to us,” he said. “It’s a very generic example of the type of analytic work that we’re dealing with, but we are doing a lot of cool things with the behavioral space in cyber to detect.”

Meanwhile, Michael McGovern, CIO and head of systems at Brown Brothers Harriman, and David Saul, senior vice president and chief scientist at State Street, debated how much a firm can truly rely on data encryption.

It was an interesting discussion, and a clear indication that while cybersecurity might not be getting the same press it did a few years ago, it’s still of utmost importance to every firm.

Proposal Problems

I know I’ve written a lot about firms partnering with fintech firms recently, but there was one thing that stood out to me specifically during a discussion about how to deal with accelerators and startups.

Bill Murphy, the CTO of Blackstone and a recent guest on the Waters Wavelength podcast, is never shy about sharing his opinion, and voiced his displeasure with requests for proposals (RFPs). His issue with RFPs stems from the fact they are often too long and complex, making it difficult for a startup to try to comply with all the various requirements set forth by the firm.

Megan Brewer, group CIO of strategy and architecture at Credit Suisse, added that lengthy RFPs often mean the only firms that can truly apply are massive vendors that already have the necessary infrastructure in place.

It’s a fair point, and one that I hadn’t thought of. Firms are often worried about making sure they are covering all their bases, but they might be missing out on a great company in the meantime.

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