Ann Neidenbach, CIO, Convergex
U.S. stock markets may be essentially unchanged for the year, but that’s about the only thing in the brokerage business that hasn’t seen dramatic shifts in 2015.
"Blockchain technology - if you aren’t already exploring, it’s well worth putting at the top of your ‘need to learn more’ list"
As Chief Information Officer at Convergex, an agency-focused global brokerage and trading related services provider, I have a unique vantage point to both witness these developments as well as have a seat at the table to analyze and take action on them. As we enter the New Year, I know we’ll see even more innovation and competition. Let me give you my Top Five trends for 2016 and, in some cases, the years beyond.
IT as Business Management and Leadership
IT professionals have come far in earning the respect of corporate management and Boards and I expect we will make even more strides in 2016. Just look at how quickly the world is changing due to disruptive technology. Technology has changed how people do mundane activities like hailing a cab or finding an affordable place to stay (thanks to Uber and Airbnb to name a few). Venture capital is throwing millions of dollars into just about any venture that has a chance to “disrupt” an existing industry. But they aren’t giving it to just any clever business person. No – they are investing that capital in IT people. Techies, Innovators, Us.
I sit on Convergex’s Executive Committee, and I can tell you good corporate strategy and solid technology planning go hand in hand now. It’s basically a two way street. Our businesses are looking for new growth opportunities, and our corporate people are looking for efficiency. We in IT are the fulcrum to those levers. One is useless without the other.
In 2016, we’re going to hear a lot about “Blockchain” technology in financial services. You don’t have to be a Blockchain advocate to appreciate the potential of secure, independently validated transactions and communications, all at a fraction of the current cost for such activities. If you aren’t already exploring, it’s well worth putting at the top of your “need to learn more” list.
Women in IT
In case you missed the byline on this story or the seemingly requisite Sheryl Sandberg reference in the title, I am a female IT professional. Those three words in combination have been oddly controversial in 2015, and I expect we’ll hear more about them in 2016 and beyond.
I say “oddly” because looking back at my career, I’ve never felt that being a woman – or a working mom, for that matter – has been a disadvantage in my professional development. Remember that the brokerage business is as replete with Y chromosomes as the tech industry. My advice to women in our business isn’t so much “Lean In” as it is “Stand Up.” Don’t be arrogant, but be your own most loyal fan. Over the years, I have noticed that women in IT tend to keep their heads down and get the work done. That’s fine, but when the time comes to say “I did that” excellent job, Stand UP!
Recruiting the Next Generation
Because we are based in New York, thus far we have been able to hire and retain the talent we need to staff our IT department. I expect that will be the case in 2016 as well, even in an intense hiring environment with Silicon Alley just a one and half miles south of us. There are still enough IT professionals who want a good paycheck rather than equity in a startup. We’ll be fine for a while.
Eventually, however, this will change and I am already evaluating what’s important to the next generation of IT professionals – the millennials. In my mind, it comes down to a series of intangibles like where they live, how flexible their hours are, and the variety of their day to day tasks. The fact that the brokerage/financial services industry is heavily regulated is going to make these changes difficult at times. But to get the next generation of talent to WANT to work in our industry, we’ll need to adapt to them. They will have enough other opportunities that they won’t have to adapt to us.
Disruption? Been there, done that, have the T-shirt
Twenty five years ago, if you wanted to buy 100 shares of IBM, there was essentially one place to go: the New York Stock Exchange. Now, thanks to regulatory changes and new competition, there are dozens of trading venues where you can buy that 100 share lot of Big Blue. Some are owned by brokers – at Convergex we own and operate an alternative trading system called Millennium – and some are independent. All of them are state-of-the-art IT systems capable of trading stock quite literally faster than the speed of light.
For those readers that are facing a Clayton Christensen style “disruptive innovation/technology” in your business, let me offer some reassurance as you do your business planning for 2016. It will be OK, as long as you innovate right alongside the new competition. Convergex’s core trading business has been around for 20+ years. The new market system didn’t put us out of business – we enhanced our client offerings by building proprietary trading algorithms and developed our own trading venues while keeping our high-touch client service model to help our clients make sense of the new world order.
“Cloud”y days ahead, and that’s great
From Wall Street 1.0 (the old market structure) to 2.0 (the current multi-venue model), we’re now busy building Version 3.0. The hallmarks of this newest iteration will be classic business management: focus on your core competencies and let low cost vendors take care of the rest.
If you had mentioned cloud computing to a Wall Street IT manager just a few years ago, you would have been met with a truckload of objections. “Not secure enough . . .” or “Our regulators will never let us do it . . .” or “Our clients would be too concerned over security. . .” What a difference 36 months can make, for even our regulator FINRA (Financial Industry Regulatory Authority) is moving its platform to Amazon Web Services. They’ll be storing approximately 30 billion market events daily in the cloud, at a net savings of $10 to $20 million annually. Needless to say, FINRA’s move is a huge vote of confidence in the cloud and we’ll certainly be doing the same in 2016 and beyond.
In closing, I am hugely optimistic for the brokerage industry, the IT profession as a whole, and women in our business as we start the New Year. While consumer technology may get the press buzz, developments in financial services specifically and enterprise IT generally are just as exciting. We have the chance to remake our businesses as leaders within our companies and anyone with a good idea can help lead the charge.