Yesterday, January 19, we published a story about DBS’ decision to switch its turret provider for its London trading desks from IPC to Speakerbus. According to a source within DBS, traders in Singapore “are said to have been outraged by the decision,” and “a planned request for proposal (RFP) to tender for IPC’s turrets for the bank’s Australian trading desks was shelved.”

The article states that “The DBS insider, who was involved in procurement decisions, suspects the reaction could have been provoked by the direct relationships IPC’s sales reps appear to have cultivated with the bank’s front-office teams.”

I’m not going to get too far into that story in this column—here’s the link again, in case you didn’t click on it above. And before switching gears, it should be noted that “DBS and IPC strongly deny that anything inappropriate took place.” From here on out, nothing in today’s column has anything directly to do with that story, though I’m going to pull some quotes obtained from that story’s reporting to highlight my points—but they’ll be used here to describe the broader industry, not any actions taken, or not taken, by the companies.

Rather, I’d like to delve into the shifting face of technology, how increasingly easy it is to change vendors (and there are more fintech startups to choose from), and some of the new risks and challenges created in wake of a (supposed) post-Covid world.

Over the last decade, investment banks and brokers, traditional and alternative asset managers, and exchanges and vendors have grown more comfortable deploying cloud-based technologies, storing data in the cloud, and running non-mission-critical workloads in the cloud. This has led to Big Tech’s growing presence in the capital markets, as well as the use of APIs as a primary means of delivering data and tools. And it’s a driving factor behind many interoperability pushes taking place throughout the industry.

The advent of cloud has completely changed tech development and procurement, and this revolution has only really taken hold over the last decade and especially so in the last five years. We’ve witnessed the rise of Software-as-a-Service (SaaS)—or infrastructure-as-a-service, and numerous other bastardized versions of (X)aaS. And this trend has only grown following the current pandemic.

There was a time when replacing a piece of trading hardware—such as a terminal, an order management system, or a turret—was considered to be “a nightmare,” as one bank CTO once told me. “There are a million new things out there, but if you have something that’s working—maybe it’s not sexy and maybe it’s a bit boring, but it’s working—to move off of that and go through the whole hassle [of switching to a new provider] is usually not worth it,” but those barriers are increasingly breaking down.

This shift to the cloud and to as-a-service (or managed service) models, though, has left incumbent tech companies in a precarious position. Fintech startups—and the fact that they are born in the cloud and are nimble—can more easily get a foot in the door at the major banks and asset managers than they could at the turn of the century. And while it’s not exactly “easy,” it is easier to make a switch than it was in, say, the early 2000s. (I said I wouldn’t talk about IPC or DBS, but in fairness and in the name of transparency, two important points: IPC saw this shift and launched the Connexus Cloud back in 2016 to embrace an as-a-service delivery model. It has also won numerous awards throughout the years in WatersTechnology-run award programs.)

Hopefully, I’ve drilled home the point that cloud has changed the tech procurement and RFP processes. The days of monolithic hardware platforms are going the way of the dinosaur. Closed off systems are no longer the norm. Users want more data and need to connect to tools and platforms that can help them distill that data to contextualize and find correlations in a sea of information. It’s a new world—and a rapidly changing one, at that.

The relationship game

This brings me (finally!) to the idea of corporate hospitality and client entertainment. Because it’s easier (again—not easy…just easier) to switch providers, and because the pandemic has pushed workforces into hybrid in-office/work-from-home models, and because video conferencing improved by leaps and bounds seemingly overnight, maintaining tight, interpersonal relationships with end-users is more difficult—or at least much different—today than it was “in the good ’ol days.” Additionally, new rules that were enacted after the financial crisis of 2008 have made corporate largess a constant concern for compliance teams of all stripes and sizes.

In some ways, I liken it to the #MeToo movement we’ve seen take hold across the world. There were behaviors that were, if not accepted, ignored or excused, and women, as a result, felt trapped—some felt that they had to tolerate the advances of skeevy, drunk men at industry conferences or after-work drinks if they wanted to advance. What was “accepted” 10 years ago simply will not fly today, even if progress still needs to be made (some might say especially on Wall Street).

Similarly—though not nearly as horrific—corporate hospitality has had to take on a new meaning. I’ll leave you with the following anecdote, which encompasses both corporate hospitality attitudes and #MeToo, in the hope that it shows how times have changed for the better.

A senior technologist at a large US bank told us a story about when he was working at a very large global bank (not DBS) in the early 2000s. A very large trading technology vendor (not IPC) took the entire equity desk—“of course, all men,” he said—to a Manhattan strip club called Scores. Drinks and lap dances were put on the vendor’s corporate credit card. He told another story of sordid Christmas parties held by a vendor at the notorious Tavern on the Green. “Drunken debauchery and philandering were the norm especially at the after parties.”

Today? “It’s been a long time since vendors did anything but take us out to lunch,” he said.

To be clear, regulations and rules have changed corporate hospitality, but it’s now cloud and Covid that are requiring vendors to think of new ways to stay close and build brand loyalty with clients. In my opinion, a quality product that’s reliable is usually the best way to keep a good relationship strong…and maybe a reasonably-priced bottle of wine over lunch from time to time is just the cherry on top.

The image accompanying this column is “The Bistro” by Félix Vallotton courtesy of the Cleveland Museum of Art’s open-access program.