May the 'Force Be With You
IMD: Although Traderforce is relatively small in comparison to the largest market data vendors, it is now part of the larger FlexTrade group. In the current environment, what are the benefits of being part of an enlarged group?
Blanco: Being part of a larger group-even if Traderforce is still a small company-
enables us to be eligible for global deals that would have been impossible to address before. We now have access to senior managers at large institutions that are already in contact with FlexTrade as clients, which is definitely an easier way to initiate a business relationship. It is always harder to fish in deep sea with a small boat rather than in a fish tank comfortably seated in a room having tea with friends! FlexTrade is well established and very healthy; such financial robustness creates visibility and reassures prospects and clients. It surely shortens the sales process. After 10 years in algo trading, FlexTrade has gained credibility and a very renowned and established brand, which by direct capillarity helps establish Traderforce as a serious brand.
IMD: Prior to being acquired by FlexTrade, Traderforce was owned by three French banks. How do the ownership models differ, and what have you found to be the advantages and disadvantages of each?
Blanco: French banks are very well organized, with formalized workflow and control procedures. FlexTrade is very business-oriented and focused on lead generation. It is a very good experience to have had the chance to work with both.
IMD: In light of ongoing consolidation among data and technology vendors, is it more important now to be able to offer combined data and order-routing solutions? What is driving this trend, and how can that create advantages for you? Will it continue?
Blanco: Yes, it is important to offer a combined solution because order routing
is now almost a commodity. Added value is based on analytics, and analytics are based on premium-quality data. There will be a growing need for analytics in the near future.
IMD: How has consolidation-such as the merger of Thomson and Reuters, and the acquisitions of local players such as Fininfo by Telekurs (and later by SIX) or Infotec by GL Trade (and now by SunGard)-impacted your business? Does this make you more agile, or does it make it harder to competeon scalability, and does it create more opportunities or challenges for a company like Traderforce?
Blanco: It impacts our business positively because it makes it easier for us to compete. Since we are smaller and customer-centric, we are definitely more reactive compared to big elephants struggling with internal restructuring. This situation creates opportunities as clients and prospects look for alternatives to those usual suspects.
IMD: How can Traderforce differentiate itself to compete against larger, more established vendors?
Blanco: Large and established companies have to deal with internal politics, old infrastructures, and complex workflows that generate an important legacy. Dealing with such a legacy implies slowness and lack of reactivity, where most of the company's vital energy is wasted on internal issues rather than on innovation. As a small player, we strive to empower innovation. This means that the main focus of our senior managers is to keep workflows and processes as low as acceptable to concentrate on empowering people's responsibility. Innovation never comes from straight order or pure disorder but from organized chaos. We listen to our clients without being driven only by clients opinions, otherwise we would end up being opportunistic, we are flexible without running like headless chicken, proactive and adapting very easily to change without anticipating too much for change. Innovation is a very complex process, it requires a very well-balanced organization that is almost impossible to manage and foster if the company is too big.
IMD: What impact has MiFID and the creation of new execution venues and data sources had on Traderforce's business? Has it created more challenges or opportunities for Traderforce?
Blanco: On one hand, it is a tough challenge because it dramatically increases the number of updates and introduces complexity to day-to-day data management. But on the other hand, it is an opportunity to make the difference in terms of quality and expertise. For example, offering aggregation components in thin technology, with a minimum technical footprint within the client infrastructure, which enables the end-user to merge different pools of liquidity and find instantly the best liquidity, is one of the key features that we now provide to our clients.
IMD: A lot of equity market data that you provide via your terminals is sourced from Interactive Data. What factors do you consider when deciding how to source your data, and are you seeking to become more independent and self-reliant for data?
Blanco: Everybody has dependency. It's very naïve to think that nowadays one can be independent. Without being cynical, it seems that lately we have seen that even big investment banks have dependencies. So, rather than seeking independence, we are looking for an optimized infrastructure and a reliable data source, easy to maintain and to upgrade. We are using Interactive Data because it is a centralized hub, and is easier to monitor than being connected to each and every exchange worldwide. This enables us to focus on our core business.
IMD: How do you view the importance of latency in your offering? Over time, will increasing demand for low-latency services encourage you to acquire more data directly from source? Or will you source more data direct from exchanges in future for other reasons?
Blanco: As far as our business is concerned "clicking on the mouse" is where latency stands. We are on the desktop business so we are focusing more on offering fast order-entry tickets, reducing the number of clicks, adding keyboard shortcuts and so on. When dealing with mouse trading over a screen, latency is on ergonomics. We are not on the server side of trading, or the infrastructure business, therefore latency is not our main concern.
IMD: Aside from speed, how important is it to offer value-added data, such as risk and portfolio analytics?
Blanco: Competition today is a question of offering added value. We believe analytics-whether on execution, charting, fundamental data, portfolio or risk-is key.
IMD: You recently decided to embed analytics into version 11 of your Traderforce terminal, rather than provide them via a separate module. What prompted the decision to change your analytics delivery model?
Blanco: We believe the future is a centralized "one-stop shop" offering most of the features that someone will want to use on a single desktop.
IMD: You have signed some significant recent contracts to help support bank-distributed trading platforms, such as Deutsche Bank's Autobahn Equity. How important is white-labeling to your business model? Does it detract from the Traderforce brand?
Blanco: We are a technology provider and we want to be recognized in the market as a financial expert that provides ASP and thin-client trading technology to the community. Deutsche Bank is a strategic partner in one of our core product lines-white-label trading technology for execution management systems-but we also provide market data terminals, risk management services and peer-to-peer data publishing. When clients need technology expertise, they know that Traderforce can do the job, since if we can do it on a very large scale for Deutsche Bank, for sure we can also do it for any other client. Counting Deutsche Bank as a partner surely helps Traderforce establish its branding more than white-label solutions could detract from it. The two companies are clearly distinct entities, and everyone fully understands the difference between a top-tier bank and brokerage firm like Deutsche Bank and a broker-neutral technology provider like Traderforce.
CEO Confidential
Name: Jean-Michel Blanco
Date of Birth: Oct. 29, 1965
Hometown: Paris
Education: PhD in Finance
Current Home: Paris
Family: Married; one daughter
Q. What book are you currently reading?
A. Biography of Erasmus by Stefan Zweig
Q. What CD is in your stereo right now?
A. Asa (R&B)
Q. What was the last movie you watched?
A. Juno
Q. What did you do for your Christmas vacation?
A. Scuba diving in the Philippines
Q. What's your favorite city or place to visit?
A. Apart from Paris, New York
Q. What was your first paying job and how old were you?
A. Salesperson in a sport shop when I was 16
Q. If you could have dinner with any person, real or fictional, dead or alive, who would it be?
A. The body of Brigitte Bardot, the heart of Jesus and the mind of Nietzsche
Q.How much sleep do you get?
A. Six hours per night
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