FIA EXPO 2022: Interview with Trading Technologies

The derivatives trading industry has gathered in Chicago to attend the FIA EXPO 2022 on 14-15 November. 

Trading Technologies, the renowned trading software vendor acquired nearly a year ago by 7RIDGE, marked its presence among peers, and FinanceFeeds had the opportunity to speak with chief executive Keith Todd and EVP Product Management Jason Shaffer.

The hot topic across much of the first day of the conference was the recent implosion of FTX. FinanceFeeds Editor-in-Chief Nikolai Isayev inquired about it as well as about TT’s upcoming institutional crypto trading solution, along with KRM22 Risk Manager product, its new trade allocation offering, algo execution, and the growing demand for all-in-one solutions.

Keith Todd joined Trading Technologies as CEO in late 2021 as part of an executive reshuffle amid the new ownership by 7RIDGE, the growth equity firm founded by Carsten Kengeter.

One of his first moves as CEO was to invest in risk management specialist KRM22, of which he is the executive chairman since its inception in 2017. The integration is already being fruitful as on the first day of FIA Expo, TT launched the KRM22 Risk Manager solution on its platform for brokers, FCMs, and traders.

This was the second product coming out of the TT-KRM22 integration, with the first being the KRM22 Limits Manager. Todd and Shaffer explained the firm has a very large development team that can easily adapt such products to their systems and offer them to clients as if they were built in-house.

Todd also discussed the firm’s announcement that morning that it had entered into a strategic partnership with ATEO Finance to offer “best-in-class” trade execution and trade allocation services to sell-side firms. “ATEO has a very sophisticated allocation engine that we’ve integrated into our own OMS,” he said. “We’ve taken this in-house and are offering it to clients as if it’s our own.”

Trading Technologies becomes an all-in-one solution

The newly launched KRM22 Risk Manager is a risk analytics product covering margining, scenario analytics, metrics and shock movements. The solution includes an “all-encompassing” risk score feature.

“TT could have built this if we took the time, energy, invested in market research, worked with clients, built it, launched it, sold it. It would probably take two to three years. Instead of going through that process, we did integration work, and here we are launching a second product under a much faster time frame.”

The executives said Trading Technologies is addressing the industry need for all-in-one solutions by becoming a provider with all kinds of capabilities across an array of asset classes and open to partnerships as if KRM22’s products are white label solutions     .

Todd said: “We’re hearing from customers who want to deal with fewer technology suppliers. Instead of having to undergo separate agreements, approval processes and integrations with multiple suppliers, we can offer a package. It’s like cable TV, where customers can just switch on the tools they want like a new channel, bringing choices and eliminating as much as possible the friction and time-to-market on those products.

“Buy-side firms currently have to buy generally an FX execution platform, a securities platform, a fixed income platform, etc. They want it in one. it’s the journey we’re on: to provide them tools for multiple asset classes with an integrated platform because the community wants sophisticated capabilities that meet the full breadth of their needs”, he      continued.  “Within the coming year, you’ll be hearing about more of our progress on this journey.”

Trading Technologies stays the course on crypto strategy

The same reasoning led Trading Technologies to offer a more comprehensive crypto solution, as announced in June with its partnership with Talos. “We’re very clear publicly on what we’re doing. We have a deep understanding of how these markets work and what traditional finance customers want.”

At first, the timing may seem off as FTX has just collapsed and the whole institutional digital asset space is taking a step back. This pause in crypto, however, hasn’t deterred the firm from its strategy as the overall sentiment is that crypto is truly here to stay, but perhaps not ready yet for the next big push in adoption until there is further regulatory guidance.

Todd said: “While innovators are important to the financial markets ecosystem, it needs to be run by adults. What happened was a tragedy that should never have taken place, but digitalization will continue. I’m glad it happened before the conference so the industry had the opportunity to digest and react to the news. I cannot believe the infighting we’ve seen in recent years in terms of which regulator will take responsibility for digital assets, but the FTX implosion will likely be the catalyst to get this resolved.”

“Once regulation is finally in place, TT will be well positioned. An appropriately regulated digital asset world is one we are already embracing and laying the groundwork to serve as customer demand warrants.”

“We’re very clear. Whether for emerging or traditional traders, we help facilitate trading. Our core direction doesn’t change at all.”

Jason Shaffer, TT’s EVP Product Management, told FinanceFeeds’ Nikolai there is clear and consistent demand from traditional finance firms to engage in crypto in similar ways they do with other asset classes: counterparty trust and transparency, sophisticated, professional scalable risk management, margin utilization for capital efficiency across the portfolio, reliable scalable global market access and professional automated tools.

“It is what TT does: to allow counterparties to be part of an ecosystem and still deliver low-latency for market participants.”

Massive momentum at Trading Technologies

Trading Technologies is experiencing a “massive momentum” fueled by parent company 7RIDGE’s investment in service quality and functionality as well as the ability to acquire and partner with the right organizations, and a favorable macro environment, with rising interest rates and volatility.

TT in March acquired algo execution specialist RCM-X, which brings another avenue to explore, adding to the “optionality” it offers customers.

“Growth and investment is happening among firms like TT customers. More sophisticated execution is very close to the top of that list,” said Jason Shaffer, adding that TT is able to make RCM-X products very easy to consume.

This led Keith Todd to give a “shout-out to the TT team” who is doing “some incredible things,” taking initiative without being told to following a massive internal change program.      Jason Shaffer expanded that such “liberation” and “unlocking of the team to carry the ball forward” was the result of CEO Keith Todd’s impact since he arrived in December 2021. “Right time, right place. All things were lined up for the massive growth spurt. But how we go about it, that’s been Keith.”