The financial services industry’s long march to the cloud is accelerating, and the reverberations are being felt in all corners. The rapid adoption of fully SaaS-based trading systems has been one of the major trends in the front-end technology space over the past few years. Plenty of ink has been spilled about the implications for the buy and sell sides, but the truth is that this shift has also resulted in a sea change for the technology providers themselves.
Web-based trading tools are nothing new, and web-based OMS/PMS tools naturally followed through innovation, yet many firms have chosen to deploy them only in the past few years. As these vendors gain market share and exposure, industry players find they can no longer ignore the benefits of the SaaS model: efficiency, stability and customisability. This has created a snowball effect, with cloud adoption on an upswing.
Despite the incredible talent that exists in our space, keeping up isn’t easy. Many of these new adopters are former clients of traditional legacy system. Transferring decades of data into a new software framework can take months and requires a deeper skill set and experience with disparate systems and datasets.
What’s more, SaaS-based providers develop enhancements on a continuous deployment basis for their customers. This is a key benefit of multitenant SaaS solutions: enhancements can be deployed to the entire client base at once, without the risks inherent in upgrading legacy systems.
As the ecosystem grows, the software naturally becomes more robust, and users get the benefit of having immediate access to it on a configuration basis.
This does come at a cost: it requires many years and extensive barrier-breaking product development and infrastructure work to earn a seat at the offering table, and firms must scour the talent pool for the “right” kind of talent.
It’s a kind of double-edged sword for vendors. On the one hand, exceptional client service and unparalleled flexibility have been major factors in these systems displacing so many legacy players in recent years.
On the other, finding talent with both the technology chops and knowledge of often arcane hedge fund workflows is a significant challenge.
It’s a conundrum that could make or break a company. Our current moment of disruption and mass cloud adoption is precisely what many technology providers have been waiting for, but what is it worth if they can’t scale? How can these firms ensure continued growth while keeping the practices that got them here in the first place?
In many cases, their answer has been to cast as wide a net as possible when searching for new talent. The market is highly competitive, so an unconventional hire who hits the mark can make a big difference. While they once may have focused on candidates who built their careers in the cloud, SaaS-based technology providers are now getting their technologists and electronic trading staff from every possible source: banks, fund managers, legacy vendors, even big mainstream technology players.
This approach can feel like searching for a needle in a haystack, but it’s simply what it takes to stay competitive. Besides, the rewards of making the right hire are immense. With so many different backgrounds on the payroll, there is an incredible diversity of thought at today’s trading tech providers, and that makes the whole team stronger.
For example, a former sell-sider will be able to draw on their firsthand experience to better serve broker clients, while an employee’s past career on the buy-side could give a hedge fund the confidence it needs to sign on as a customer.
Hiring from all different kinds of firms is a clear path to providing white-glove service to diverse sets of clients.