Wong: Barclays Capital has several digital innovation initiatives, providing customers with instant access to investment and market information. What do you see as the next evolution in investment banking channels?
Patel: We recently launched a new flow derivatives platform called COMET Online which is delivered via our successful BARX portal and fundamentally changes the way structured products are traded. The system provides a complete quoting and execution solution to clients’ desktops, overnight price calculations via email, plus enables clients to request quotes via email.
COMET has enabled us to increase our share in Equity-linked structured products and pushed our own internally structured technology into 20+ external private banks in Asia Pacific. As of now we offer over 465 underlyings across 12 different markets.
Against some stiff competition, COMET recently won an internal Barclays Capital CIO award for innovation. Of course, we can’t afford to stand still so we’ve got further enhancements coming to the platform, working closely with our clients so we can better serve their needs.
Wong: Barclays Capital recently launched a new Asia Pacific Convertibles Index, offering investors information on benchmarks and indexes. How critical is the role of sophisticated business technology in meeting the expectations of institutional clients?
Patel: Our clients rely on us for our pre and post trade analytical information to give them an advantage in the market, so it’s critically important we invest in the technology to provide this functionality in a simple and easily-navigable way. For example, our convertible bonds application CB Insight gives clients access to the same models and data used by our own trading desk. We provide other sophisticated pre-post analytics through an application called Portfolio Workbench which has proved very successful in attracting new clients who are able to leverage our new Cash Equities trading systems.
Wong: What technology initiatives can we expect to see from Barclays Capital across the region in the next 12 to 18 months?
Patel: We invested significantly in the region during 2009-2010, building out new cash trading platforms and deploying to our key markets. In 2011 we will continue to enhance these platforms to ensure we retain our competitive advantage and will deploy into more Asia Pacific markets. Given the recent success of our Structured trading platforms you can also expect more technology innovations to put trading solutions onto the client desktop.
Wong: How do you ensure your IT roadmap is responsive to regional market developments, while also reflecting your organisation’s global IT mandate?
Patel: The key is to maintain flexibility in your organisation and work with your business to prioritise ruthlessly. The financial industry is fast moving and dynamic, and does not allow you to set a concrete five or 10 year roadmap. We do have a Technology strategy and roadmap – but at the same time we are realistic about change and responding to technical innovation and market opportunity. The challenge is how to manage an ambidextrous organisation where you are innovating and building on one hand and stabilising your organisation on the other – doing both with equal passion and commitment. At Barclays Capital, we enjoy a very close partnership with our business in prioritising the Technology delivery schedule against business opportunities and mandatory market driven changes. Examples of our success in achieving this balance include rolling out the Arrowhead changes at the start of 2010 and the Jasdaq/Hercules merger in Q3, and we will shortly be going live with the OSE J-Gate trading platform.
Wong: What are your thoughts on virtualisation, cloud computing and Software-as-a-Service (SaaS) as the dominant trends within Asia’s financial services sector in the next 12 to 18 months?
Patel: As an organisation we are always driving our efficiency through active management of our estate and utilising technologies such as compute cycle scavenging and virtualisation. Our focus for virtualisation is primarily on our development and testing environments, as we do not currently use it for our production trading environment (although some groups with less demanding requirements have made this jump). Cloud computing has huge potential but we’re not ready to use external cloud services given the concerns over security and maintaining control of sensitive data that are always at the forefront of our minds given the stringent regulatory environment. However, we are looking at opportunities to leverage private cloud technologies as they mature.
Wong: What strategies are you implementing to manage the risks associated with high volumes of trading and investment banking online?
Patel: In today’s commoditised world it is critical to provide a stable and scalable system to our clients so we are constantly looking at ways to improve the performance, stability and the capacity of our trading platforms. When we built out our systems across Asia Pacific we factored in sufficient growth to deal with very large volumes, using our experience of handling huge volumes in the US. As we grow our market share and coverage, and the markets themselves get larger, we’re staying proactive in reviewing our performance so we can address those challenges early on. I presented our 2011 technology roadmap to our firm’s global Equities Executive Committee a few weeks ago and the business recognises our ability to meet client demand is a critical distinguishing factor which must be prioritised against rolling out new functionality.
Wong: In your view, which countries in Asia Pacific are taking the lead in implementing innovative, business-enabled technology; and why?
Patel: When you look at things from the markets and exchange perspective, there is no doubt that Japan has been taking the lead on building the next generation trading platforms. What we saw from the TSE with Arrowhead in January 2010 is a prime example of innovative technology enabling the business, which has been followed more recently with J-Gate from the OSE.
The other exchanges in Asia Pacific are just as innovative and on a global level – for example, SGX is planning to launch the fastest exchange globally and NSE has recently started offering Co-location space. We will continue to see these trends in Asia Pacific with the launch of PTS in Asia Pacific. Chi-X is gaining foothold in Japan and the launch of Chi-East (a multi-market dark venue) could change the landscape of trading in Asia Pacific and will offer competition to the exchanges in Asia Pacific where until recently the concept of alternative trading venues has been limited.
Wong: From a technology perspective, what’s the next ‘big thing’ we can expect to see in the wider investment banking landscape?
Patel: All investment banking teams are investing in how they can do things faster and more efficiently. We are no different in this regard. I would expect to see investment firms continuing to use cutting edge technology to reduce the latency to the markets and executing their clients’ instructions quicker to give them the market edge.
Over the last few years, we have seen the securities industry evolve as the business becomes more about technology and technology becomes more about the business – this will continue and the cross-pollination will further deepen. You will see more technologists in the front office, and front office staff who understand how technology works and know how to exploit the latest technical advances to take their business to the next level.
With the focus from regulators, we should also expect to see steady investment in middle and back office technology as well as continuing focusing on risk management platforms. As the business gets “smarter” you will also see the regulators apply stricter controls.
Wong: What IT skills are in high demand in the investment banking arena; and how do these differ from the skill required in other banking sectors?
Patel: One word….Innovation! It’s easy to hire strong developers, BAs and support personnel. It’s not so easy to hire individuals who question the status quo and innovate to solve problems. This is something Barclays Capital strives to achieve throughout its recruiting process and internal people development, coaching and mentoring programs. We hire the best people from within the industry and from outside the industry – we believe that diversity in the workforce helps to breed innovation and out-of-the-box thinking.
Wong: Every IT leader, particularly at your level, has a legacy they wish to be remembered for. What is yours?
Patel: First and foremost I want to be remembered for building a first class Equities Technology team in Asia Pacific that is instrumental in paving the way for Barclays Capital to be a top tier Equities house. Clearly, leaving behind a legacy means leaving behind a sustainable model which includes grooming the next level of leadership – this is just as important to me.