Innovation, Singularities and Saturation

One of the holy grails of marketing must be creating critical mass behind an idea, influencing people to the point where you're not actually selling to them, but the groundswell of opinion actively engages with making something a success. You see elements of this social determinism all the time, from popular Facebook group Humans of New York crowdsourcing tens of thousands of dollars in 45 minutes to help a kid with learning difficulties, through to something as direct as banning smoking in pubs (to illustrate how effective that's been, think on how many of your social group smoke now as opposed to seven or eight years ago).

It feels a bit like that sometimes in the financial technology space, as if people talk about things enough that they eventually develop a momentum of their own, a sense of self-fulfilling prophecy that this is definitely going to happen, and that everyone had best get on board. Trouble is that while the idea may be great, the particulars may not always be suitable for everything.

Cloud is a perfect example of this, as illustrated at a recent Microsoft and Excellian event in London. One question from the audience asked if it would be possible to utilize a cloud-based grid environment, or grid-as-a-service, to cloudburst and perform real-time pre-trade risk measurements like credit valuation adjustment in a high-speed, high-frequency environment. The answer, simply, was no, not at this time. The inherent latency factor in cloud made it a no-go - if you could handle a second delay before the results came in then absolutely, but it wasn't quite there yet for the low-latency field. The audience member was asked what reaction time he was looking for, and the room went quiet for a moment. Curiosity winked at questioning, which in turn waggled its eyebrows at sensitive information and eventually sighed, before coming back to honesty.

"We're down to microseconds," he replied flatly, and the poor chap on stage nodded in a sage manner.

"The technology still isn't there for that," the Microsoft representative chipped in. "Maybe in a couple of years."

Either way, it's clear that while cloud certainly has its applications, the hordes of people now with soul-crushingly frustrating titles like "cloud evangelist" aren't the silver bullet.

Innovation Equations
Indeed, we're pretty guilty of this here at Waters too. The program for our recent sell-side event in Singapore contained more than five mentions of the word "innovation", or derivations thereof, and it's a meaningless word. Something might be innovative, but you don't really innovate in any practical sense. You invent, create, build on, improve, maintain or extend.

But there's such an incredible focus on "innovation" lately, from the chrome-and-glass hell of Canary Wharf through to various "incubators" and "fi-tech funds" that are floating around, all seeking to mimic the Bay Area in finding the next big thing, fast. It's almost like certain elements are forcing certain ideas and practices more common with Dotcom 2.0 to an inevitable critical-mass moment.

And while investment in new technology is of course admirable, and the boundaries should very much be pushed, you do have to wonder if this in turn engenders a lack of focus on making something solid and current, first. Frequently I'm struck by how backwards the financial services industry often is in terms of basic technology. Not always of course, but if people dispute that in its entirety, just look at the prevalence of fax and Excel, or the continuing "innovations" that make a system wholly electronic. In 2014.

So create something innovative by all means, but make sure that the education is there, the attention span is there, and in this modern world where the dark prospect of cyberwarfare threatens much of our critical infrastructure, make sure it's built in a sturdy way on solid foundations. While we all joke about the Millennium Bridge, being on something structurally suspect is a profoundly concerning experience.