Sell-Side Technology Awards 2016: Most Promising Sell-Side Start-Up — R3

One has to look no further than Markit's phenomenal success for an illustration of this efficacy: Back in 2003, Lance Uggla, the firm's erstwhile CEO, and a group of similarly minded credit default swaps (CDS) dealers sought to introduce transparency to the CDS market by producing a daily CDS pricing service underpinned by a consortium of banks' end-of-day CDS prices, which Markit would assimilate, homogenize, and sell back to the banks the following morning just before the market open. In many respects, New York-headquartered R3's story mirrors that of Markit.

The firm, founded in September 2015 by a consortium of nine banks (that number has since swelled to 43)-Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, JPMorgan, Royal Bank of Scotland, State Street, and UBS-wins this year's most promising sell-side startup for its work on the blockchain and distributed-ledger fronts. This is only the second year this category has been on offer, with Green Key Technologies winning the inaugural award.

Given the number technology firms currently evaluating or dabbling in blockchain and distributed-ledger technology, how has R3 gone about differentiating itself in what is likely to be a market that witnesses significant growth in the near future, along with large numbers of casualties offering nothing more than “me-too”-type services? According to R3, rather than building a blockchain or distributed ledger solution in isolation and then taking it to the banks, it has been collaborating with them from the off, allowing it to identify and address industry challenges first-hand. R3 and its partners collaborate on research, experimentation, design, and engineering to develop enterprise-scale shared-ledger solutions to meet banking requirements for security, reliability, performance, scalability, and audit. 

R3 illustrates its considerable promise by also winning the best overall product of the year category (see page 60), even though the firm is a technology provider but does not have a product per se. So, does the support of a large number of banks guarantee success? No, but it does provide the consortium with a vested interest in ensuring R3’s future, and, if the industry’s futurists are to be believed and that 2016 is the year that blockchain and distributed-ledger technology starts to permeate large numbers of business processes, R3 has a bright future.

And, given that David Rutter, ex-chief executive of interdealer broker Icap, is at the firm’s helm, it’s only reasonable to expect big things from R3.      

R3 and its partners collaborate on research, experimentation, design, and engineering to develop enterprise-scale shared-ledger solutions to meet banking requirements for security, reliability, performance, scalability, and audit.