- Having seen brokerage technology from both ends of the spectrum, how would you say brokerage technology has evolved over time. Further, what are the operational, business & technological challenges faced by the brokerages and how can those be effectively addressed using technology?
Having been a part of the financial services industry for over 19 years, I have had a ringside view of how the industry has evolved over the last 2 decades. In my earlier avatar, handling the tech mantle for large financial institutions, I gained an insider’s view of the nuances as well as the challenges of this industry.
The evolution has been multi-fold and every aspect of doing business has gone through a sea of change. I see the change in the brokerage industry as a function of evolving connectivity in the initial stages, to a combination of connectivity, information availability, changing demographics and increased compliance needs in the later stages.
In mid to late 90’s, CTCL applications helped the industry move from open outcry to electronic trading However due to severe limitations imposed by the cost of communication technology, electronic access to markets and growth of broker network was stunted.
The advent of satellite connectivity in the late 90’s, enabled brokerage houses to expand their presence to metros & other high potential locations. Suddenly brokerages started opening branches in far off places, which threw up an unprecedented challenge of having the ability to manage risk centrally. It was then that the innovative ODIN suite of products that could run on low-cost servers (instead of mainframes) provide real-time market data feed & lightning fast turn-around times for orders and trades on narrowband satellite networks, low baud rate dial-up (RAS) connections, as well early 64Kbps Internet links powering entire online trading experience for brokerages, and at the same time provided centralized multi-exchange trading terminals as well as risk management systems. This brought about the biggest technological revolution in the Indian capital markets.
With terrestrial (MPLS) connectivity and broadband becoming ubiquitous between 2000- 2010, the cost of connecting branches and business partners across the length and breadth of the country dropped and ushered in the age of large national level brokerage firms. The improvements in overall web 1.0 technology were relatively swift and significant enough for the industry to latch on to the Internet trading bandwagon. The need to provide seamless, real-time market data & access on early Internet connections was a tough ask, but this too was delivered ahead of time by the ODIN team through the Net.net suite of products. It ushered in the age of browser-based trading and the first-generation trading portals.
2010 to present day has been a journey of Web2.0 to Web3.0 and hypermobility. With the much more liberal availability of bandwidth and data connectivity, the move towards browser and mobile-based trading has been rapid, democratizing access to markets. It initially supported a rapid growth of the physical branches and franchise network for full-service brokerages.
In today’s date, I see the following challenges/ opportunities for the brokerages-
Increasing cost of compliance & regulatory changes, limited reach due to physical KYC & costs of misrepresentation, cyclical markets leading to idle infrastructure, profit margin squeeze due to discount brokerages, franchise led growth, mobile trading, cloud computing and increase the cost of transactions.
- Given the challenges mentioned above, how is 63 moons helping brokers succeed?
We at 63 moons technologies are working on cutting edge technology to help brokers navigate the challenges and make most of the emerging opportunities –
- Deploying automation, artificial intelligence & cloud computing to bring cutting-edge innovations for Broking; addressing areas of inefficiencies & increasing compliance
- Providing intelligent, software-defined Brokerage Technology Platform as a Service
- Devising Elastic solution mirroring revenue line of the brokers – delivering cost efficiency through rapid scale out or scale in responding to cyclical markets
- Deploying Conversational User Interface (CUI), Robo Advisory & Machine Learning to democratise & deliver high quality services for the masses
- What changes do you see in the way brokerage houses are responding to the changing environment, achieving their ambitions and how are you supporting those?
I see a marked difference in their approach to growth. They are very clear about digital being the new future. Mobility & digital presence are the two very important cornerstones of the strategies I see emerging. The business model as well its positioning is clearly evident in their strategies; discount broking & full-service wealth management are clearly being demarcated. Technology is now being viewed as the enabler and I also see that their understanding of this space is far more nuanced. The new age broking entrepreneurs are looking at an extremely aggressive pace of innovation and are willing to take bold strides. We at BTS are fortunate to have an access to this very focused and ambitious bunch of professionals, who are aiming to redefine the industry. We have been working very closely with them, understanding their challenges & working on technology innovations that can ease the path to their ambitious goals. We seek active feedback from these focused leaders. Our innovations like the Smart Dealer, ODIN Voice, ODIN Voice Cast & ODIN Wave are examples of such collaborative innovations.
- What are the emerging trends in technology and how it can impact the broking industry?
Cloud computing & AI have the potential to completely disrupt the space and the way the industry operates. The application of machine learning & AI capabilities in broking is at a nascent stage. With ODIN Voice and ODIN Bot, we are breaking new ground. These innovations empower the next generation “Conversational User Interface” of the ODIN suite. We see a huge potential to completely transform the way the industry operates. ODIN Bot is an AI-enabled chat-bot that can service any client need without the intervention of a human. ODIN Voice is the smart assistant for the brokerage industry, like what Amazon Alexa and Google Home are for smart home assistants. These are intelligent & context-aware assistants for brokerage house services and act as workforce multipliers for them. The power of cloud computing and advanced machine learning techniques provide the most intelligent &cost-efficient way to handle future growth and create new delivery channels.
- Given the cyclical nature of the market… How can brokers bring elasticity in infra spend?
I see that a general understanding of cloud computing and its benefits is improving rapidly. As the adoption picks up, the transformation will be far swifter than any other we have seen in the last two decades. With the constant change in the industry, agility is key to success. The ability to iteratively experiment, learn & innovate is going to be the new normal. As newer delivery channels emerge, big data, machine learning & cloud will become the standard part of the technology landscape. The only way a brokerage with burgeoning technology solutions can keep its costs in check, and aligned to revenues, is by adopting cloud computing solutions. Such solutions are architected grounds-up to provide on-demand elasticity that enables brokerages to tackle cyclical markets by having IT costs that mirror the revenue line. The entire IT solutions stack needs to have the ability to grow and shrink dynamically, without human intervention or capex, to cater to real-time business demands. This, without compromising on latency, reliability & security needs, is the future of brokerage technologies.
It is our constant endeavor to power capital markets through futuristic technovations and towards that end we promise to bring many more innovations, which would help the brokers bring unparalleled efficiencies and deliver the next generation of products & services, catering to their rapidly evolving client base.
63 moons is a silver sponsor of the Fintech Summit, taking place on 30th October, 2018 aboard the Queen Elizabeth 2 cruise ship (QE2) in Dubai, United Arab Emirates.
Keshav Samant comes with an experience of over 19 years in the BFSI Technology industry. He is a technology leader with a global experience in the areas of business & technology alignment, enterprise architecture, strategic planning, & client relationship management in the financial services industry. A well-rounded professional with experience in conceptualizing the macro perspective and bring it to realization through leadership, communication, process, and technology expertise. His experience includes forming enterprise-wide technology roadmaps, solution architecting, program management, business unit management, time and budget bound delivery of large mission-critical initiatives, consulting & strategic relationship management. He brings a rich blend of global as well as Indian experience in BFSI industry to the Brokerage Technology Solutions (BTS) unit.
Prior to joining 63 moons, he has worked in different leadership roles in leading global financial institutions like Religare Enterprises and Mubasher Financial Services Group. At Mubasher, he headed the global technology team as the Group Chief Information Officer. Mubasher group runs financial services platform providing market data feeds and execution services of over 75 exchanges across the world. Prior to Mubasher, he worked as Director and Group Chief Information Officer at Religare Enterprises Ltd, a leading financial house in India. He led a global team of 350+ IT professionals, managing technology platform for various business entities, like Lending, Retail Broking, Health Insurance, AMC, Wealth Management, Institutional Broking & Global Capital Markets.
He was earlier associated with 63 moons as VP & Head IT. He was part of the core team that was instrumental in mission-critical initiatives of erstwhile FTIL (63 moons) group like MCX, MCX-Stock Exchange, DGCX, SMX, Bourse Africa (Mauritius), IBS Forex & BFX. He now heads BTS Group at 63 moons technologies limited as the President & CEO. He is focused on transforming the brokerage technologies solutions suite, & taking ODIN, the flagship product of 63 moons to greater heights. Email: [email protected]