In this FIFTH and final installment of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age.
The five videos cover the following:
Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption
Part 2: IT Outsourcing and Transformation
Part 3: Revolutionizing FinTech: Looking into the World of Data Automation
Part 4: Technological Implications of Cultural Transformation
Jim Jockle (Host): There’s so much noise, right. And whether its hitting the trades or the New York Post, you know, this company’s going to take down Bloomberg, this company’s going to disrupt payments for the next rest of the world. I’m now dealing with Apple Pay, you know, just naming names not pointing fingers. How do you cut through the noise?
Paul Rowady (Guest): Well, very challenging it takes, I mean this is why you have independent advisors that are hopefully devoid of a sufficient amount of bias. I also think personally philosophically, and again its part of our business model and part of our business vision, part of our value proposition is the extent to which you can make your decision support data-driven. I mean this goes to we’re in a fascinating organizational development phase in financial services in general and then really interesting in particular pockets. A lot of talent is going to recognize soon and maybe I’m a little biased to this because I was a front-office trading guy derivatives and highly automated trading strategies and designing the risk systems that gave you the feedback loop and all that. A lot of talent and a lot of creativity was dedicated to the front office aspects because that’s where the paychecks were, that’s where the big glory was. But I think we’re entering into an era, where the glory is going to be in the overall operational agility of the organization to be able to respond to dislocations in these flash points so to speak, big and small, and so this trading strategy development mentality is slowly going to leak into the post-trade realm and the idea, and again my own biases because I’m focused on this operational analytics, but I think that if you look at the whole organization as if it were a trading strategy and if you believe that the automation of that workflow is and the data that gets thrown off from the workflow is worth studying. So that you can continue to optimize. Then a lot of that creativity is going to flow further down into these various workflows and the design element is going to be applied to that which hasn’t been that sexy ever. Which gets to something I just wrote about post-trade processing becoming sexier. There’s natural brain drain at the front office because you have a lot of automation, you have machine learning and some hype going on there. You also have just the economics, you don’t need as many bodies because the margins aren’t there and you have a lot of talent vision and creativity on the beach that some of which is going to flow into the so-called old, analog, sleepy back office. But it’s these leaders, it was Citadel who coined the phrase and its now a trademark thing owned by Northern Trust, operational alpha. They saw that this feedback loop was a revenue generator that the efficiency and the agility of the entire workflow is really the best practice. Not just having all this greatness at the front and then if you needed to turn you got stuck because your back office couldn’t keep up, you had failed trades, you had faxes going, papers falling on the floor, people calling in sick. That is what needs to change.
Jockle: Well, Paul, I haven’t heard the term faxes in a long time. I want to thank Paul, thank you Paul for joining us today and having this conversation. Paul is Director of Research at Alphacution. Please check out the website. The website is…
Jockle: Thanks, Paul. Enjoyed our time. And thank you again for watching the Numerix Video Blog, I’m your host Jim Jockle. Please stay in touch with us on LinkedIn and on Twitter @nxanalytics. Thanks so much.