eFOREX interview: smartTrade Technologies Providing cutting-edge solutions for cross-asset class trading
smartTrade Technologies is reaching 20 years of experience in delivering disruptive cross-asset class trading solutions and as a market leading technology provider it continues to win multiple awards. We caught up with David Vincent, cofounder and Chief Executive Officer of the firm to discover more about what it takes to become a leader in the highly competitive FinTech marketplace.
David, you have told us before that technology is your passion. How important has that enthusiasm been in helping you to steer smartTrade to become a global leader in FinTech?
Indeed, technology is one of my passions. I find it fascinating because it is a fast-paced and ever-changing field that is becoming more and more complex. I am convinced that the future of finance is based on technology. Before being CEO of smartTrade, I held the position of CTO, which allows me to share my experience and my point of view on technology with all our teams and with our customers. It is important for our customers to know that the person who runs the business has a deep understanding of the technology and can ensure R&D is on the right track and that smartTrade continues to provide its customers with sustainable and future proof solutions.
Please remind us about the key services and solutions that smartTrade now offers and where the firms main offices are located.
smartTrade Technologies provides agile end-to-end trading solutions supporting Foreign Exchange, Cryptocurrencies, Fixed Income, Equities and Derivatives with connectivity to a wide range of liquidity providers, aggregation, smart order routing, order management, pricing, distribution, risk management capabilities and a HTML5 user interface. Since the beginning of smartTrade, we made the decision to design the platform from the ground up to handle multiple asset classes. It enables us to easily add new asset classes. In 2018 we added cryptocurrencies and we recently integrated the options and money market into the platform. We have offices in Aix en Provence, London, Milan, New York, Singapore, Tokyo and in September, we opened a new subsidiary in Geneva. Switzerland is a major financial and technology hub where we provide sell and buy side clients with cutting-edge trading solutions in foreign exchange and fixed income. Having a local presence reflects our commitment to existing customers to always provide them with the best possible service.
Over the last few years there has been increasing demand for your two turn-key solutions LiquidityFX and SmartFi. What factors are behind that?
The increased adoption of LiquidityFX and SmartFI, which are offered as fully hosted and managed solutions, is mostly due to our model. Clients see obvious benefits of outsourcing infrastructure, IT support and maintenance. It allows them to free up resources and assign them to more added value projects, or to avoid inhouse development cost or to simply overcome to shortage development resources. smartTrade’s private cloud is completely managed, maintained and controlled by us and we exclusively use local engineers in each of the major geographic financial hubs (London, New York, Tokyo) to support the platform as-a-service solution – a decision which provides our clients with a secured and controlled environment – thus retaining full oversight and ownership of our clients’ data – a key concern for many of our clients.
Additionality each client has a fully separate, segregated and single tenanted deployment to achieve business benefits in a phased manner and at their own pace and to suit their migration, budgetary, security, personnel or other constraints. With the private cloud service, our clients are also able to benefit from a fast time to market. smartTrade has SOC2 Type 2 certification meaning we are annually audited for adherence to strict policies and procedures covering all areas of the service such as: security, availability, process integrity and so on.
LiquidityFX is a very advanced platform with rich functionalities and features. We have over 130 connectors to banks, exchanges, ECNs, non-banks and multi-bank platforms allowing new clients can quickly leverage on our wide connectivity stack.
The SmartFI platform has really picked up in the past year as the fixed income market is changing. Clients mostly approach us looking to electronify their business or wanting to replace their legacy vendors. They are in search of an innovative technology partner with a strong connectivity expertise to aggregate data and execute. We have extensive experience developing connections with venues including dealer-toclient (D2C), dealer-to-dealer (D2D), futures exchanges and swap execution facilities (SEFs) as well as direct connectivity to banks.
Finally, both of our out-of-the-box solutions allows clients to inject their own business intelligence, such as aggregation rules, routing rules and trading rules and we give them access to data collected and tools to exploit them.
A major area of development for smartTrade over the past year or so has been data, and particularly analytics. Why is that and where is interest in your smartANALYTICS solution coming from?
Of course, the regulations, but not only, explain the success of smartAnalytics. Our customers rely on their data recording obligation to analyze and track patterns and correlations in their trading to improve their execution efficiency. smartAnalytics assists them with regulatory reporting as well as business performance reporting (for example order rejections, pass rates, decay analysis, and market impact are used to analyze and improve execution). In addition, thanks to the smartTrade REST API, our customers can manage their static data, their rights, their commissions, their business units, etc., and add an external banking logic to the configuration of their platform thus avoiding the manual update of their systems.
Last year smartTrade launched a cryptocurrency solution. What impact do you think crypto will eventually have in the FX space and in what ways are you exploring new ways to make use of it?
In 2018, smartTrade helped innovators in the cryptocurrency and digital securities market, such as Seba Crypto AG, by introducing trusted capabilities and processes from established markets to these emerging segments. Our platform LiquidityFX handles cryptocurrencies alongside traditional asset classes. The platform's crosscapabilities mean that customers differentiate their offering by the ability to create synthetic cross rate (e.g., BTC/KRW from USD/KRW and BTC/USD). What we have seen in the crypto market that could influence the FX space is the trading hours. Cryptos are tradeable 24 hours a day, 7 days a week, which could force the currency market to remain open. Another difference lies in the post-trade: the crypto-regulation is done instantly via the blockchain. This could particularly apply to currencies and speed up the settlement process.
How have the types of clients you have been servicing over the past few years changed and what factors are influencing this?
Over the last few years, we have onboarded more and more customers seeking for greater transparency and control over their trading processes. Regulation is of course another factor that has driven various players to services like ours, but not only. Technology that was traditionally reserved for the sell-side because of its high cost of entry, such as aggregation, is now available to other types of financial firms. We find that buy side and corporate are buying more sophisticated solutions that allow them to have new features, new workflows to increase their performance and be more flexible. In particular, we have seen a strong demand for automation from wealth and asset managers who are under pressure to grow and become more efficient while lowering execution costs. The need for technology is even more noticeable in the fixed-income market as the buy side can play an increasingly important role in the market with peer-to-peer connectivity initiatives. Another strong trend we have seen is the need for automation in emerging markets such as Poland and Turkey.
smartTrade works with both small and large firms. In what ways are they each able to benefit from the solutions your team develops for each client segment?
The LiquidityFX turnkey end-to end solution is designed to address trading needs of any size buy and sell side firms. Customers can select the modules they need and integrate our solution with third-party systems. This modular approach allows us to meet the needs of small and large businesses. We offer an off the shelf solution that allows smaller clients with lower budget and simpler functionality needs to go live very fast while for big players we provide a more sophisticated setup and the possibility to inject their own intelligence using our REST, Java and FIX APIs.
You have talked about delivering a coherent pricing model for all your clients. What is that and what benefits does it provide?
smartTrade is a pure tech-player, we do not interfere with liquidity. We want to stay neutral and transparent. All our solutions are based on a flat fee (vs. volume-based fee) model which enables clients to reduce and predict their trading costs, using a fixed price, without brokerage fees, resulting in higher profits. This ability to improve their hit ratio, reduce their slippage and minimize their market impact is what motivated clients.
Amongst several awards smartTrade has won this year one was for Best liquidity aggregation system provider of the year. In what ways does the continued fragmentation of the FX market play into the strengths of the firm?
Fragmentation is still a major concern in FX but it’s even more obvious in Fixed Income. Financial market players are more and more equipped to face fragmentation more efficiently and it allows them to achieve better trading performance. You still need to be connected to the right player, use aggregation and smart order routing technology. smartTrade's solutions are plug-and-play technology for a quick time to market. smartAnalytics can help them understand which are the best venues to get effectively executed.
Why is reputation so important when it comes to technology provision in the capital markets and how has smartTrade managed to establish and maintain it so well?
We are servicing a well-connected industry where reputation is key. Since the company’s inception, we have repeatedly demonstrated our ability to deliver quality solutions, on time, with no risk for our clients. Client satisfaction is our primary concern and the company structure allows us to be flexible, attentive and reactive to client’s requests. Having local operations and offices globally is extremely important to insure a minimum response time but also to better understand local trading specificities.
Client satisfaction is clearly extremely important to smartTrade. How has the structure of the company and the way it is organized helped you to deliver on that?
A few years ago, we created a Customer Success Team (CST), which is dedicated to helping customers achieve their goals. This team is key for our clients. People in this team provide clients with useful resources and reliable support, they know all their clients projects very well and what needs to be done to ensure they are implemented successfully. Our CST team is here to guarantee a smooth and on time delivery of the clients’ projects.
Keeping your clients happy is half of the equation but what about your staff? Why do people like working at smartTrade and what does it take to attract the brightest and smartest people in this industry?
Our human resources department is doing a great job. Their service is based on four pillars: a great place to work, technical expertise, innovation and professional development. We believe that the performance of our employees is only possible if they are happy at work. We implement a dynamic human resources policy that promotes accessibility, openness, trust, collaboration and diversity. Our flexible organization and way of working contribute to a more collaborative and social environment. Team building, sports and charity activities are regularly organized to stimulate our team spirit. We also fully embrace cultural diversity: 23 different nationalities work together every day, which encourages creativity and personal enrichment. Technical excellence is our recipe for success. Our employees are always keeping up to date with the latest innovations thanks to a strong continuous training program provided by the smartTrade Academy. We are always on the lookout for new ways to improve our systems and perform robust stress testing to make sure we always deliver the best of the technology. Professional development of our people is key, we are committed to support our new joiners in their roles and upskill them.
Many leading FinTech firms are starting to explore the use of AI and Machine Learning technologies in FX. What work is smartTrade doing in this field and what are your expectations about how these technologies will be leveraged for trading applications?
We have seen an increasing demand from our customer for AI and Machine Learning. This is why, a few years ago, we launched smartAnalytics. Of course we have a very strict process to ensure that we provide our customers with accurate, clean, usable and high quality data.
We are increasingly hearing about the concept of Corporate Social Responsibility (CSR). What does this actually mean for smartTrade on a day to day basis and how does CSR shape the way you do business and help to support your brand development?
For smartTrade, CSR is a way of doing our business and a way of life. It offers a dynamic framework through which our company expresses its values, and is in line with the agile, modern and human image which we wish to embody. CSR is a key topic for our clients, employees and shareholders. It supports our brand development and, from the origin to the long term, our company history. More precisely, the key points of our approach lie partly in the strong values which have been present since the foundation of smartTrade, as well as in the five dimensions identified below: Ethics, HR, Community and Sports, Environment. One of our recent commitments is on worldwide reforestation efforts. We have been very touched by the huge fires in Amazonia so we signed-up with a platform which enables us to take action through the plantation of different kind of trees. smartTrade is focusing on helping particularly the region of Dassa, Burkina Faso in their project of preservation of fauna and flora in the area.
What plans do you have for adding to your local presence in markets around the world and increasing your global footprint still further?
We have been growing our sales team with new hires with strong track records to accelerate our global expansion. This is part of our growth strategy on the Swiss market with the Geneva subsidiary and not just limited to it. We are seeing a strong demand from financial institutions in Southern and Central Europe looking for more sophisticated trading solutions which we intend to efficiently and quickly address. We also put a special emphasis on our Asian subsidiary as market shares are growing, with references such as Asahi, Mizuho. We are committed to providing local support available 24 hours a day, 7 days a week, anywhere in the world.
smartTrade is celebrating 20 years of business. Looking ahead, what ambitions do you have for the firm and how will you be positioning it to ensure it continues to deliver cutting edge technology and stays ahead of your competition?
I’m proud of what smartTrade has achieved as a team and that clients are loyal it means that we are doing a good job. I feel there is still plenty of room to grow. My goal in twenty years time is to be the global leader of multi asset trading solutions. To do so I think we need to keep doing what makes us successful today: continue delivering very high-quality services to keep our client satisfaction to the highest level and innovate.