BST European Summit 2015: Agility Key to Reducing Risk, says Aspect Capital CTO
Barney Dalton, chief technology officer of Aspect Capital, delivers the keynote speech at the Buy-Side Technology European Summit 2015.
![barney-dalton-aspect-capital barney-dalton-aspect-capital](/sites/default/files/styles/landscape_750_463/public/import/IMG/836/317836/barney-dalton-aspect-capital.jpg.webp?h=c86b8518&itok=jIfiI33x)
"Agile software development is often advertised as a key to increase productivity, but for us it has been an important ally for reducing risk as well," explained Dalton during his keynote address at the BST European Summit 2015.
For Aspect Capital, a UK-based alternative investment management firm that relies heavily on proprietary trading software, the large fines imposed by regulators in recent years on trading errors at buy-side and sell-side firms were a wake-up call.
The highly regulated environment, according to Dalton, is driving capital markets firms to become more risk-averse, although how they go about achieving this balance while increasing productivity through further automation against the backdrop of incidents like the Knight Capital fiasco, illustrates the acuteness of the challenge facing them.
Back in 2012, Dalton started looking at what capabilities he had in-house and what he could deliver with his incumbent technology stack. But he soon realized that the manually intensive testing process Aspect Capital had in place, and its project-based approach, was too risky, and therefore had to change.
Given that the CTO, by his own admission, lacked some of the skills in-house to induce the change, he brought onboard four consultants — who he referrs to as the "four wise men" — to look at the different aspects of the development process.
“There had been an awful lot of automated tests written in the past to support this new process and we had multiple releases a day so that over time it become a non-event,” Dalton said. "Over time, what used to be a high-risk and quite scary release became more of a boring release – this is how we knew it was successful.”
A Non-Event
What Dalton established while working with the team was that the best way to reduce risk was through adopting an agile development strategy, the objective of which was to make every release a non-event by spreading the quality control, the testing and the release processes throughout the development chain.
“There had been an awful lot of automated tests written in the past to support this new process, and we had multiple releases a day so that over time it become a non-event,” Dalton said. "What used to be a high-risk and quite scary release became more of a boring release – this is how we knew it was successful.”
Big Cultural Change
For Dalton, the most challenging part of the entire process was inducing a cultural change within his technology team.
"To really succeed, you need to empower your team to own the process and have the ability to change and improve it. But it is you, as CTO, who hands over the keys to them, which is sometimes the hardest part.”
Dalton said that thanks to this more agile development approach, Aspect Capital had significantly reduced defects in production since 2012 by reducing the duplication of work and by breaking down the release process. But crucially, he said, it was most important to empower Aspect's people to drive that change.
The Bottom Line
- The highly regulated environment and the large fines handed by the regulators are pushing firms to be much more risk averse than they were in the past. But reducing risk while improving productivity remains a challenging task.
- Adpting an agile software development strategy can significantly help with the automation and reduction of risk, but often represents a big cultural change within the company.
- Dalton says that when trying to induce change, one important thing is to empower the people to drive that change.
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
Facing platform shutdown, former IEX Cloud head buys its assets in 11th-hour bid
Tim Baker, Pedro Aguayo, and a silent partner have come together to purchase IEX Cloud’s assets days before the exchange was to retire all its products on August 31.
Recent volatility highlights tech’s vital role in fixed income pricing
MarketAxess’ Julien Alexandre discusses how cutting-edge technology is transforming pricing and execution in the fixed income market amid periodic bouts of volatility
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
Where have all the exchange platform providers gone?
The IMD Wrap: Running an exchange is a profitable business. The margins on market data sales alone can be staggering. And since every exchange needs a reliable and efficient exchange technology stack, Max asks why more vendors aren’t diving into this space.
This Week: Trading Technologies completes ANS deal; State Street; Equinix; and more
A summary of the latest financial technology news.
Interactive Brokers looks beyond US borders for growth opportunities
As retail trading has grown in volume and importance, Interactive Brokers and others are expanding international offerings and marketing abroad.
JP Morgan’s goal of STP in loans materializes on Versana’s platform
The accomplishment highlights the budding digitization of private credit, though it’s still a long road ahead.
As data volumes explode, expect more outages
Waters Wrap: At least for those unprepared—though preparation is no easy task—says Anthony.