Before we get into yet another discussion about cloud (and I’ll also hit on ICE’s fixed income expansion), a quick note about our coverage over the last two weeks of the year. Obviously, if there’s any major breaking news that pops up, we’ll have that covered, but usually it’s very quiet from Christmas Eve through New Year’s Day. What we will have, though, are extensive looks at some of the key tech projects that happened in the capital markets in 2020.

So if you’re like me and working these last two weeks, don’t forget to check in. Otherwise, we’ll have plenty for you to read when you’re back at work in January.

Refinitiv Takes to the Cloud

At the beginning of February, long before the western world was worried about Covid, we wrote about Refinitiv’s plans for the next evolution of its TREP market data platform, known in long form as the Thomson Reuters Enterprise Platform. Here’s how Max Bowie described the all-encompassing solution:

“At its core, TREP is the ubiquitous platform—more than two decades old—that was created to solve the problem of getting market data from point A to point B. Think of TREP as the heart, lungs, and entire nervous system of any trading operation. When it functions properly, the body runs smoothly. But if it experiences problems, parts of the body are starved of oxygen—in this analogy, oxygen represents data—and don’t work properly. Even worse, trading on stale data could cause losses as the market moves but the data in the system remains stagnant. There’s another reason this analogy represents TREP well: Trying to replace it would be a lengthy—not to mention risky—operation, to be performed only by teams of skilled doctors, probably involving multiple surgeries spread out over a long time to mitigate any dangers.”

Well, to keep going with Max’s analogy, I guess the transplant operation has truly begun, as the data giant is moving TREP to the cloud (which will no longer be known as TREP). You can click here to read all about what this latest release entails and how this transition to the cloud will work.

For this column, though, let’s try to examine what this shift hints at for the future of the marketplace.

Every month we write about a new company that is embracing cloud-delivery mechanisms in one way or another. Sometime in the next two weeks I’m going to write a deep-dive detailing all those projects from 2020 that we wrote about, but let me highlight one since they’re a competitor (at least in some areas) of Refinitiv: In September, Max wrote about how FactSet is beginning to migrate its physical ticker plant to Amazon Web Services’ EC2 cloud. The vendor says the move will enable it to offer faster onboarding times for new data sources and clients, while reducing latency and delivering greater capacity and flexibility.

While FactSet’s move is a big one, Refinitiv’s is much bigger than that. TREP isn’t just the vendor’s ticker plant that can operate independently—it’s a core part of clients’ on-site infrastructure, and a shit-ton of applications—for analytics, risk calculations, reporting, and trading—that connect to it for data.

So let’s take a look at that client base: Either those clients are already moving to cloud delivery, themselves (and TREP is responding to that movement), or those clients will have to migrate to the cloud to run in the same environment as TREP. And to parse that, maybe they’ll have to make more use of APIs to connect to TREP in the cloud, which is not such a huge project for the applications individually, but could be a lot for a firm’s data staff to manage migrating them all at once, along with their many other projects.

This move for Refinitiv seems to come down to two main issues. First, it’s about retaining existing clients who don’t want large on-site IT infrastructures, and who would consider switching things out to lightweight new platforms like Pegasus Enterprise Solutions, Xignite, or BCC Group, or simply making the move to Bloomberg.

Second, this move could be looked at as Refinitiv taking the “app store” model to the next level. Essentially, they put everything in the cloud, they can offer pre-built (for Refinitiv, build it once, re-use it endlessly) integration to a wider range of content sources and analytics—things that Refinitiv doesn’t have, that others do better, or would be prohibitive to build themselves. Basically, let clients configure everything (from Refinitiv and from third parties) in the cloud, and run it all through a cloud-TREP that’s sophisticated to serve the complex needs of an entire financial enterprise.

I haven’t fully gotten my head around whether this is something where Refinitiv is going to drag customers along kicking and screaming, or if they’re the ones being pushed as the result of a couple acquisitions and pressure not only from Bloomberg, but from other “big tech” companies (think AWS). Feel free to help me better understand: anthony.malakian@infopro-digital.com.

SS&C Advent Looks to the Cloud

Speaking of moves to the cloud, SS&C Advent (formerly Advent Software before that big 2015 acquisition) also has big plans to move most all of its offerings to the cloud…but it’s going to take some time.

About a month ago, I spoke with Karen Geiger and Steve Leivent, who are the co-general managers of Advent, with Leivent focusing on wealth management and outsourcing, and Geiger heading asset management and alternatives. When we spoke, the company had recently announced a string of product enhancements, but I was more interested in hearing about the company’s future state, so naturally the conversation shifted to cloud development.

A little back story: in the institutional asset management and hedge fund world, Advent is best known for the Geneva portfolio management system, the Moxy order management system, the APX client management solution, and Genesis, the company’s portfolio construction and rebalancing offering. Of those fairly-ubiquitous buy-side tools, only Genesis is cloud-native.

Geiger says that the plan is to get those other platforms—and more—either rebuilt for the cloud, or retrofitted. “We’d like to do a transformation where we can offer an entire suite that is cloud-based, whether that means building additional cloud-native capabilities, or transforming some of our legacy solutions, like a Geneva, to be able to plug-and-play with a much more open cloud platform,” she told me. “This would be a multi-year endeavor, but we’re starting by building off what we already have with Genesis, and extending that.”

You can read the full story here, but this is going to be a years-long project, and it’s a project that has yet to be clearly defined internally as to how this process will work. But, if one wanted to read the tea leaves as to how this transformation will work, there’s Geneva SmartSync. This is a new capability that’s been built into Geneva that aims to “more intelligently” push data out from the accounting system based on changes that the user makes that then trigger accounting changes. “In the past, Geneva was very batch oriented, where you’d run reports nightly and it takes however long it takes,” to process, Geiger said. “We’re moving much more into a dynamic environment where you’re expecting that Geneva is talking to other things. Geneva isn’t solving for all use-cases; it’s not solving for all users. It’s definitely more of a back-office accounting system and then we want it to push data intelligently into other solutions and being a lot more open and API focused.”

To take advantage of things like automation tools and even machine learning, embracing the cloud becomes a necessity. Additionally, much like how Refinitiv needed to move to the cloud so that analytics, risk, reporting, and trading apps could feed into this new iteration of TREP, the same is true for Advent if they want to offer a true front-to-back offering that can seamlessly connect with apps that their buy-side clients rely upon.

And, finally, the profile of users on the buy side is “transforming,” Leivent said.

“Especially with access to an API, users expect us to be able to integrate our products really well—whether that’s within Advent or within the broader SS&C umbrella—and APIs are the way that we are doing that. But I think that they are also expecting us to support the greater ecosystem of other vendors and partners, and make sure that our systems can connect.”

As I wrote last week, end users are struggling between best-of-breed solutions, or choosing true front-to-back, one-stop-shop solutions. There are no easy answers, but also as I’ve written before, gone are the days of the closed off monolithic platforms that marked the beginning of the 2000s—even if you’re a so-called one-stop-shop, you need to connect to outside applications. And that’s largely thanks to the advent (see what I did there!) of the cloud.

And Some Fixed Income

“Gone are the days of the installed heavy terminal, heavy workstation.”

Those aren’t my words, I’m just using them to justify my previous points. No, they’re the words of Lynn Martin, president of fixed income and the Intercontinental Exchange’s Data Services unit. This was part of a deep-dive look at how ICE is looking to build on its fixed income offering after a spate of acquisitions from 2015 to 2018. Since then, though, the exchange has been working on interoperability issues between these acquired pieces—and any regular reader of this column knows how much I enjoy writing about interoperability issues.

Now, I want to write about data in the fixed-income world, but I need a bit more time to better understand the broader industry. (Want to fill me in? Hit me up: anthony.malakian@infopro-digital.com.)

With that said, I do think that ICE’s strategy is very interesting and could have major implications for users (especially if we talk about the cost of data) going forward. Though ICE’s current focus is on combining its fixed-income assets, its end-game may be a much broader vision: With its equities and derivatives markets, and now its fixed-income data and analytics, ICE as a whole now has a unique insight into every aspect of an issuer’s financial performance. Data aggregators may also capture and aggregate this data, but ICE represents the source of the data—and owning the origins of that data is potentially even more valuable than the data itself.

ICE Data Services is competing with the likes of IHS Markit (which was recently bought by SS&C Global and which could/should create new and interesting data offerings), Refinitiv (which is in the process of being acquired by the London Stock Exchange Group at a time when Refinitiv is adjusting its company focus as a workflow/collaboration tool), and Bloomberg (which is still—you know—Bloomberg), as well as a litany of specialists in the space, as the fixed-income market is wide and varied.

And then there’s MarketAxess, which we also wrote about this week. The fixed-income venue, which also has a range of data offerings and partnerships with other data providers in the space, is working on expanding its pre-trade automation capabilities, looking at aspects of its trading processes where it could better forecast the outcome of clients’ trading activities. The move is in part a continuation of its experience with CP+, an AI-powered pricing engine that MarketAxess launched in 2017.

Again, we’ll be writing more about the fixed-income market in the near future, but for the time being, hopefully that feature on ICE’s fixed-income business provides a good hint into how the bond market is evolving, and MarketAxess shows how some of the tools in the space are evolving.

The image at the top of the page is Claude Monet’s “Sainte-Adresse” courtesy of the National Gallery of Art.