Next-Gen Consultancy for Financial Markets

By Guy Melamed, CEO at Exberry

May 13, 2024

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Ambitious financial exchanges need to keep growing. Yet in the world of capital markets this is not always a straightforward task. Each jurisdiction has its own national characteristics and different way of doing things. If an exchange decides to build its own trading or clearing infrastructure, unless it is happy paying an exorbitant cost, it will typically have to wait a number of years for delivery. So, what are the alternatives for exchanges? 


Buyer beware

The advantages of establishing a new market, rather than enhancing an existing one, present an inviting opportunity for exchanges. Instead of offering tech facilities based on 20-year-old working practices, now there are exciting opportunities for exchanges to leapfrog in innovation and establish brand new markets, with a clean slate. 

Advice on setting up these new markets with the supporting infrastructure and technology support is critical. Pre-trade, trading and post-trade phases all need to be carefully considered in terms of delivery, deployment and support. 

When considering an adviser, it’s essential to tread carefully, especially with those from established legacy firms. Their commitment often wanes after the system reaches the deployment and delivery stages. Additionally, advisers from organisations that lack a tech-centric focus may risk developing systems that could quickly become obsolete, stifling future innovation. Another significant concern is the timeline for project completion. Advisers from such firms may not prioritise project efficiency due to their compensation models, which are typically based on the time spent rather than project milestones. This could lead to prolonged development periods, potentially stretching over several years, which can be particularly challenging in the dynamic field of financial exchanges. 

Exchanges need to ensure systems are not only delivered in a timely manner but also built to be flexible and future-proof. Most importantly, they need their advisors to be fully on-board with helping them through the process of building and deployment. Additionally, in a shifting regulatory environment where requirements can frequently change, it is essential to ensure that your advisory partner remains aligned and supportive throughout the process.


A tech partner for the journey

There is a different approach, however, which is to work as partners with clients, rather than simply consulting. This is because our service does not stop once a project is defined. Ideally, turnkey solutions should be provided over the full lifecycle of the project. 

Experienced architects and solution managers should work closely with clients to guide them through defining methodologies, whether that be for cloud integration, or cutting-edge on-prem and bare metal solutions. Once a project has been delivered, the team will still be on hand to sustain the change. 


Knowledge for the future

The exchange industry is in the midst of a technological revolution, the likes of which are seen only once every 25 years or so. Because the trading and post-trade infrastructure is changing, a partner well-versed in groundbreaking technology is critical to help you navigate through.

Exchanges pivotal for EU’s Capital Markets Union

The EU’s Capital Markets Union (CMU) is receiving strong backing, with widespread enthusiasm evident among stakeholders who are optimistic about its successful rollout. A significant concern has been the persistent lack of on-screen liquidity in European markets, dominated as they are by over-the-counter (OTC) trading. This contrasts sharply with the US where, according to the European Central Bank (ECB), 75% of corporate financing is conducted through capital markets, compared to Europe’s reliance on traditional bank loans.

All Markets Rise: Maximising Exchange Profit by Modernising Across All Sectors

Imagine a scenario in which a large, successful financial exchange is making profits across all its markets alike, from equities, fixed income and derivatives, to commodities and FX. Yet, sadly, this vision is far from reality. Oftentimes smaller and less liquid markets, such as for fixed income and derivatives, find it difficult to obtain the modernisation of infrastructure they need, even when it is just a simple feature request.

Regulated Exchanges and AI: What’s Behind the Hype

The topic of AI has been the subject of a number of panels at recent industry events attended by Exberry. We thought it would be helpful to provide a snapshot of some of the leading thinking on AI, particularly how it is predicted to affect regulated exchanges.

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