July 2014: Beware the Snake Oil Salesman

While preparing for an upcoming investment book of record (IBOR) webcast recently, I was chatting with the CIO of a large New York-based buy-side firm about his experiences to date with what is undoubtedly the hottest topic on the buy side at the moment, even though some might describe it as over-hyped. He explained that he had been intimately involved with the extensive and laborious ground work that his firm had conducted in preparation for the long haul toward its ultimate goal of producing accurate, transparent and reliable start-of-day and intra-day positions for its small army of portfolio managers and traders, with the view to enhancing their ability to make more judicious investment decisions on behalf of their clients. He explained that while technology plays a crucial and undeniable role in allowing the firm to convert theory into practice, it’s also important to acknowledge that for complex and often protracted projects like those that typically involve the development of an IBOR, third-party vendor-provided, off-the-shelf solutions that can be implemented “out-of-the-box” simply do not exist, and that any vendor making such claims should be treated with same skepticism as a snake oil salesman.
One would assume that anyone who has risen to the helm of their firm’s technology hierarchy would be well-versed in dealing with the myriad vendors serving the capital markets, evaluating their wares, and possessing a “BS” radar sensitive enough to discern practical advice from spurious claims. But, given that the above scenario is a recurring theme with many of the CIOs I have spoken to over the years, it appears that not all technology heads have developed this ability.
For a financial technology publication like Waters that has close ties with the third-party vendor community, this sentiment might sound like heresy. But as far as I am aware, the publication, launched over two decades ago, has never espoused the view that technology alone is the panacea for all maladies. What we do focus on, however, is the importance for vendors to genuinely understand the nature of their client’s business, the extent and the vagaries of the technology and operational challenges they face, the client’s desired end-goal, and perhaps most importantly, the collaborative and consultative approach to arriving at that destination, which involves no small amount of hand-holding well after the contracts have been inked. Any vendor that does not understand that it’s not just about the technology, is no more useful in the long run than a purveyor of snake oil, and should be dealt with accordingly.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
WatersTechnology latest edition
Check out our latest edition, plus more than 12 years of our best content.
A new data analytics studio born from a large asset manager hits the market
Amundi Asset Management’s tech arm is commercializing a tool that has 500 users at the buy-side firm.
How exactly does a private-share trading platform work?
As companies stay private for longer, new trading platforms are looking to cash in by helping investors cash out.
Accelerated clearing and settlement, private markets, the future of LSEG’s AIM market, and more
The Waters Cooler: Fitch touts AWS AI for developer productivity, Nasdaq expands tech deal with South American exchanges, National Australia Bank enlists TransFicc, and more in this week’s news roundup.
Inside the company that helped build China’s equity options market
Fintech firm Bachelier Technology on the challenges of creating a trading platform for China’s unique OTC derivatives market.
Experts say HKEX’s plan for T+1 in 2025 is ‘sensible’
The exchange will continue providing core post-trade processing through CCASS but will engage with market participants on the service’s future as HKEX rolls out new OCP features.
‘The opaque juggernaut’: Private credit’s data deficiencies become clear
Investor demand to take advantage of the growing private credit markets is rising, despite limited data, trading mechanisms, and a lack of liquidity.
Overnight trading blocked, consolidated tapes, BlackRock’s Larry Fink, data costs, and more
The Waters Cooler: Deutsche Börse provides crypto custody, FIS has a new GenAI tool, and some M&A activity in this week’s news round-up.