Weathering disruption in financial markets through tech

David Brown, Chief Commercial Officer, IPC. Image courtesy of IPC.

While videoconferencing tools such as Zoom or Microsoft Teams may be enough for most enterprises during the new normal, financial trading needs a more specialised approach.

There are, however, fintech companies like IPC that seek to address this need through voice communication systems like trading turrets, infrastructure as a service, and specially designed software for traders and their staff.

To learn more about how financial trading endured the volatility brought about by the pandemic, Frontier Enterprise spoke to David Brown, Chief Commercial Officer of IPC. We also asked him about other topics, such as the challenges faced by his sector, the changes in fintech, and the history of remote and hybrid work in financial trading.

You’ve been with IPC since 2003. What have been the highlights of your time there, and what are the most significant changes you’ve seen since then, specifically when it comes to fintech?

A digital revolution has continued to drive growth across Asia and indeed the globe, transforming the way we work and do business. The most significant changes to the fintech industry have been witnessed since the ramifications of COVID on the working environment. The pandemic triggered a shift towards remote and hybrid working, and more recently, market volatility created a host of opportunities for sophisticated investors, eager to take advantage of market fluctuations in their leveraged trading strategy.

The pandemic demonstrated the benefits of being able to trade securely and compliantly at any time, from anywhere, and on any device. During times of unpredictability, this is a huge competitive advantage. Access to the most up-to-date, efficient, cost-effective, and scalable technology is crucial. As markets react and adjust to global events, organisations are becoming acutely aware of the necessity of resilience — both now and in the future — and want fintech solutions that include a future-proofing component, allowing them to adapt and preserve their competitive advantages in the face of any unanticipated events or problems.

Through the span of my career at IPC, I have been fortunate enough to have held a variety of different leadership roles. This has given me a great perspective on the full breadth of IPC talent and how we work to support our global customers every day. It has been a privilege to work with an exceptional team who continue to create new ways of trading communications, network services, and connectivity solutions in response to evolving market demands.

How exactly is technology helping ecosystems of financial market participants weather market volatility?

For many organisations, the turbulence across financial markets and the black swan events occurring at alarmingly regular intervals have expedited the necessity for buyers and sellers to be connected. Low-latency connectivity is fast becoming the cornerstone of global leadership, and technology has played a pivotal role in navigating this volatility as ecosystems of financial market participants accelerate their digital transformation plans to weather the storm.

As the ramifications across financial ecosystems continue to be felt, global financial market participants will need to utilise multi-cloud platform ecosystems to trade faster and become more agile to enhance competitive advantages; a reality that is being felt by both traditional financial traders and cryptocurrency traders alike. Market participants require an ecosystem that’s not only large, but incredibly diverse, so they can easily find their natural counterparties, as well as any opportunistic or alternative providers of liquidity.

Emerging trends such as new trading protocols, new types of market participants, and the evolution of the market structure have led to industry-wide fragmentation, and this further magnifies the importance of open communication.

What do you think are the biggest challenges that the trading communications and cloud connectivity sector are facing this year and in the immediate future?

The ramifications of an unstable market are being felt across the entire financial ecosystem but history tells us that the market can bounce back just as quickly, and even more dynamically, when the time is right.

Ecosystems of financial market participants are consequently becoming increasingly reliant on cloud infrastructure to stay connected. This is a trend that continues to grow and will have significant implications for the sector, with the global financial cloud market expected to reach US$90.11 billion in 2030, up from US$23.67 billion in 2020.

With digital acceleration increasing at a much faster velocity due to tougher market conditions, organisations will have to become experts at “change”. Cloud infrastructure, security and high-speed connectivity will become critical to navigating market volatility and reducing the impact across the broader financial ecosystem.

What emerging technologies are you planning to adopt?

With omicron putting many full return-to-office plans on hold in early 2022, supporting hybrid workers and providing traders with mobility has continued to be one of IPC’s most important priorities in 2022.

We will continue to explore innovative voice-based technologies and biometrics to replicate the benefits of a real-life trading floor in today’s hybrid office, and to ensure compliance and security against a complex regulatory backdrop.

Likewise, as demands for artificial intelligence (AI) across banking gain pace, e.g. for fraud detection and humanising conversations via chatbots, we will continue to enhance our offerings to meet our clients’ requirements.

How do you envision remote and hybrid work will evolve within the next three to five years? How has digital acceleration affected remote and hybrid work overall?

Although there is an air of normalcy returning to the financial services world, the pandemic has left an indelible mark, particularly on the working environment. The idea of a hybrid trading floor would have remained just that — a concept — only two years ago. However, today, it is becoming a reality, but the transition requires both a dramatic cultural shift and technological upgrade.

As a result, many financial institutions are turning towards voice-based technology and biometrics to replicate the benefits of a real-life trading floor in today’s hybrid office and to ensure compliance and security against a complex regulatory backdrop.

COVID-19 has accelerated the trend of people working alongside robots and smart machines. The industry has become more focused on how robots can help humans be more efficient by leveraging technology such as AI, natural language processing, and big data.

Traders have seen significant improvements; they can now populate tickets by just using their voice. Order books are loaded and not typed in, while against a backdrop of pristine and clean audio, structured or partially structured data, and intelligent transcription engines understand the asset class and the accompanying jargon.

Biometrics are already being deployed in many areas of authentication, fingerprint control, or retina scanning. Voice printing, for compliance for trading is an obvious case, and can be used to positively confirm that people are there. It can provide a clean record of all the details that transpired on a call, which in turn helps with the trade reconstruction process.

With the implementation of this revolutionary technology, traders and other regulated users can replicate virtually the same physical experience they would have in the office anywhere, including at home. It will evolve over time as innovation continues to unfold. There is no turning back the clock. Hybrid working is here to stay.