Seeking Comparative Advantage on the West Coast

New York has its share of the US technology providers serving the financial industry, and is certainly mastering co-location for its major securities exchanges. But there's something different in the Northern California air, which I discovered on a trip to San Francisco and Silicon Valley last week. Professionals there, in a region with free-flowing creativity and innovative spark, have a lot to offer, which benefits the entire US securities industry.
San Mateo, Calif.-based market data provider Xignite, for example, has developed ways for global firms to handle data across their locations worldwide, with greater sophistication and speed. Palo Alto, Calif.-based trade messaging services provider Tibco recently unveiled its Faster Than Light (FTL) messaging system that reduces transmission times by leveraging remote data memory access (RDMA), and continues to search for and develop ways to automate trade reporting needed for regulatory compliance. And network provider Reliance Globalcom Services, which has offices in San Francisco, is working on applying multicast computer networking technology to financial industry communications.
Even the banks are getting into the act. San Francisco-headquartered Wells Fargo—whose East Coast presence was bolstered by its acquisition of Wachovia— decided last year to start self-clearing its trades, in part to eliminate overlap of clearing operations. It turned to fellow San Franciscan company Calypso for support in this endeavor.
Meanwhile, a major California pension manager built a true trading desk of its own, just in the past couple years, enabling it to handle more assets and more complex investment strategies. This may be the ultimate act of West Coast operations management creativity—finding or creating comparative advantage in handling technology functions within one's own firm.
Just as Northern California's financial technology providers are taking novel approaches to innovate and better-serve the industry, so are its financial services firms. Choosing between using providers and innovating in-house requires a thorough assessment of what will yield the most comparative advantage, and it is a choice the industry should watch and evaluate.
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: https://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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Fintech powering LSEG’s AI Alerts dissolves
ModuleQ, a partner and investment of Refinitiv and then LSEG since 2018, was dissolved last week after it ran out of funding.
Halftime review: How top banks and asset managers are tackling projects beyond AI
Waters Wrap: Anthony highlights eight projects that aren’t centered around AI at some of the largest banks and asset managers.
Speakerbus goes bust, Broadridge buys Signal, banks mandate cyber training, and more
The Waters Cooler: The Federal Reserve is reserved on GenAI, FloQast partners with Deloitte Australia, UBS invests in Domino Data Lab, and more in this week’s roundup.
Speakerbus ceases operations amid financial turmoil
Sources say customers were recently notified that the trader voice vendor was preparing to file for administration and would no longer be operational.
SS&C withdraws SEC application for clearing exemption
The fintech had been granted exemption in 2015 for SSCNet, a global trade network, that allowed it to provide matching and ETC services.
Standard Chartered CDO on AI, CAT on life support, Paxos files for clearing status, and more
The Waters Cooler: FIX updates MMT, a Finnish datacenter hangs in the balance, and partnerships galore in this week’s news roundup.
CAT on life support after appeals court ruling
Ahead of a comprehensive review promised by the SEC, lawyers believe that the recent overturn of the Consolidated Audit Trail’s funding order could herald its demise.
Paxos files to become SEC-registered clearing agency
The application comes after the blockchain infrastructure company completed a pilot in 2021 to test its settlement service.