Tony Bisegna: Greg, thanks for joining today.
Greg Fortuna: Yeah, thank you for having me.
Tony Bisegna: I thought we could chat a little bit today about what you're seeing, trends in the industry, specifically around liquidity and some of the changes going on with T+1 and things like that.
Greg Fortuna: Yeah, absolutely. I mean, certainly within our space across GlobalLink, we have a number of different asset classes that we cover. As you know, we have our FX centric set of products, really where this is affecting the most, and then we have our liquidity products. We've been T+0 there for a long time. And so it's not affecting it as much on that side. But on the FX side of the house, we're seeing a lot of changes at our clients. A lot of our clients are already reacting and moving staff towards the US to really tighten up those timeframes around T+1. And we see that there's going to be a need for more electronic solutions around this because right now the way things are run in that space, you've got your front office, your middle office, your back office, and each of them use different technologies across the board. And there's a bit of a linear set of integrations that goes when something runs in the front office, there's a file and it gets kicked out and runs along that. And with T1, we're seeing that time frame for settlement really move in. And so that information flow is going to have to speed up. And so we see that there's a bit more of bringing things together closer and we've sort of started to develop technologies to address that and move from a linear integration to more of this contextual sharing where we can immediately disseminate information across all of the parties to a transaction in real time, and we think that's going to help bring workflow process efficiency into this and really help our clients along this journey as they move to T1, I believe, next May.
Tony Bisegna: What are you seeing on the managing of the liquidity side of the equation? So trading desks now have to manage liquidity. Liquidity can be fleeting. Algo is now becoming much more common. We're seeing that out there. What types of tools and pre-trade tools to decide whether they use an algo or they do a request for quote, what are you seeing on that?
Greg Fortuna: Yeah, so obviously on our side, we have our set of pre-trade analytics is our BestX tool set that that we have out there now, market leading TCA tools and both on the pre-trade and post-trade side. So that's been a new trend where people have looked at more pre-trade analytics. It used to be you do your trade and then you go measure how did I do? And you use TCA for that. Now you're able to put that into this tool set and get feedback and get direction in some cases around not that we're telling them how to trade or where to trade, but we're giving them insight into if you go here, if you use this particular set of algos, if you use this particular bank, here's some expectations. And we're seeing that lead into a new field where clients are actually looking to pull information. And this bleeds into the artificial intelligence and some of the adoption there where we're seeing clients sort of be able to pull different streams of information, both on a trade side, a news side, and pull that into a sort of black box ahead of it and say, okay, if I'm trading this currency pair and I'm trading at this time of day, where and how should I do that? Should I use an algo, what bank should I use? Should I look at a dark pool or a peer-to-peer and really leveraging the technology to be able to help direct flow for certain currency pairs and certain circumstances.
Tony Bisegna: So with all this technology, all these tools developing, trading desks, the traders on these desks, the buy side shops are struggling with desktop space. How are you addressing that?
Greg Fortuna: Yeah, so that's the other piece is we've seen a trend where they want to use all these tools, but they don't want to have 25 vendors and they don't want to have all these integrations and all these things to manage. So there's definitely been a bit of an uptick in this idea of a portal or a platform that acts as a portal into the market. So you have a single integration into this platform and that allows you to have this contextual sharing with everyone who partners with the platform. So we've created that. We've gotten ahead of that trend. and we have now launched that under the global header and GlobalLink name. And there's our new distribution platform. It has all of the GlobalLink products and the majority of the Global Markets products already live currently with our client base. It allows clients to take pieces of each of those products and use them to help with their unique situation and their unique setup in a different way than ever before. So now I can go in, I can place a trade, and it'll automatically feed information to the BestX TCA set. It'll pull in insights from our SSA team. It'll send it to Vector to our single dealer platform. It'll send it through FX Connect or Currenex to hit the market outside of there. And it's all in real time, all contextually, all based on how I set it up from that perspective. And we're looking to sort of expand that across our entire product set and then into the market and those types of tools. They give clients the ability to harness all this power and all this data that's out there in a way where they don't have to have that big tech spend because a lot of our clients are faced with do more with less, you know, there's more regulation, there's more everything, and they just don't have the budgets to do that. And that's where we come in. We come in with a solution that allows them to tap into that expertise.
Tony Bisegna: So when you look forward, what are the challenges they're facing right now? You know, they've got all this technology. They're trying to manage really tight liquidity pools. You sit in the middle between the sell side and the buy side. So in your interactions with the buy side, what are they looking for from their sell side providers?
Greg Fortuna: Yeah, so it depends. It depends on who they are and where they are. So, you know, we have our very large asset managers and you know, they are moving the type of volumes that would move the market. And so their relationship with the sell side is a bit different. And they're really looking for partners. They have banks such as ourselves where they have very good, strong partnerships with. They look at research, they're very interested in being able to do a large volume with a single entity, allowing for them to net across currencies and do that without moving the market without leakage. We have some of our smaller players. They're looking for price discovery. They're looking I want to put into my, for example, Currenex platform, and I want to see streaming prices from a number of different banks. And I want to see that because they don't have that large book. They don't have maybe the expertise that may come from the other side and they're using the tools more to find out where the market's at.
Tony Bisegna: Size, sophistication, liquidity demands dictate style.
Greg Fortuna: You know, we have our high frequency traders. They trade very differently than some of our asset managers that are more on the hedging side of the business. And so it really depends. And that's where it's key to have that suite of products and that expertise to be able to meet them at where they're at. You know, I think where mistakes get made in the technology side is where people believe they built the best tech and they try to get the whole market to conform to them. You know, really our approach is looking at each client individually, looking at their challenges, at what's constantly evolving and constantly evolving and creating a custom solution for that singular client taking our tool set. And that's why this new GlobalLink Digital platform that we rolled out, that's why that's so important because they don't need all of our products, but they may need pieces of our products to solve a puzzle for them.
Tony Bisegna: And to be able to real time evolve. It is very important from my experience, it has to constantly change. You have to constantly be looking forward and coming up with new solutions. So your product needs to be fluid, not static.
Greg Fortuna: And it needs to be. And you used a great word. It needs to be in the middle. If you're just catering to the buy side, then it's not performing for what it needs to for the sell side. If you're just catering to the sell side, then it doesn't meet the needs of that buy side. So you really have to look at both sides of the equation. You have to make sure that what you're doing makes those relationships stronger, that makes those relationships more efficient, that makes those relationships better. And you're not just creating an issue for one side or the other, you're not creating. And that's difficult. That's a balancing act for all of us to do. You want to provide all the information, everything you can to one side. But you have to be fair and balanced. And, you know, regulation helps. We run an MTF, we run a number of different regulated entities and bodies. And so there are people that are sort of verifying how and where we're doing things. But it's also part of the philosophy and where we sit in the market and where we think that is the strongest market position for us.
Tony Bisegna: That was a great update. I'm sure we could go on for hours on this, but thank you for your time and we'll see you again soon.
Greg Fortuna: Yeah, no, thank you for having me.
Tony Bisegna: Thanks.
With extensive experience providing global credit financing to some of the world’s largest institutional investors, we are well-positioned to meet your business goals. Our customizable liquidity solutions, diverse financing options and asset intelligence can help you mitigate risks and maximize returns.
*Standard & Poor’s, December 2021