Communicate, communicate, communicate. That is the key to a successful digital transformation, according to executives from ASX, OCC and Stifel, who spoke on a panel at this year’s virtual Technology of the Future (ToF) conference.
“You cannot communicate enough on expected outcomes or where you are at in your transformation,” said Dave Hoag, Senior Vice President and Chief Information Officer at the U.S. equity derivatives clearinghouse OCC. “You might think you have talked about it 1,000 times, but not everyone had heard it each time, including both internal and external audiences.”
While cloud technology has been in the mainstream for years, massive critical infrastructure projects in the financial markets are unique. Hoag at the Chicago-based OCC, which handles clearing for 20 futures and options exchanges and trading platforms, recognizes this as his company introduced the Renaissance Initiative in 2019 to modernize and transition its technology infrastructure to the cloud.
“Moving to the public cloud is new to the regulators. It’s one thing for a bank to run in the public cloud, but for a public utility to run in the cloud is a lot different. So [for us] one of the biggest challenges is making sure we have good answers for our regulators, and we get the go-ahead from them.”
Stifel, the U.S.-based wealth management and investment banking firm, launched their alternative trading system (ATS) earlier this year, making it the first regional ATS to launch in the U.S. The project required complete buy-in across the organization, as well as the SEC and institutional players.
The Stifel Crossing Platform (STFX) officially went live in June, offering unique liquidity to the firm’s 3,500 institutional clients. Critical to the success of the mission was pulling all the pieces of the project together and working with a wide variety of constituents.
“You cannot underestimate the level of communication needed for these kinds of transformations,” said John Spensieri, Managing Director, Head of U.S. Equity Trading, Stifel. “We have a very flat, entrepreneurial organization and need to articulate everything – whether we hit or missed a milestone, but also pre-marketing the project before we even get started so we are all singing from the same hymn sheet.”
Fourteen hours ahead of Stifel in Australia, the ASX is building an exchange for the future. In a recent earnings call, CEO and MD Dominic Stevens echoed this point.
“Those organizations at the forefront of technology innovation will succeed -- not those relying on aging legacy systems. By being technology-driven, ASX can deliver more customer-focused products and services, collaborate better with its customers, and allow its customers to collaborate with each other,” he said.
For Dan Chesterman, CIO at the Australian Securities Exchange (ASX), not only is having a CEO and board members who are tech-savvy an important component to getting the support needed for large technology overhaul projects, but also the regulator.
“For us, the regulators have been a key stakeholder with any tech transformation. This means meeting very regularly and doing deep dives and status updates. This is a great way to keep the conversation current. And from these discussions, they know we want to leverage contemporary technology to help us change, innovate and adapt quickly.
As an exchange, given the critical role ASX plays, we have a responsibility to engage much more deeply with our regulator than other types of companies.”
Despite the current global pandemic, major tech transformations, new launches and product roll-outs continue to press on at full steam ahead, as indicated by the efforts from ASX, OCC and Stifel. And given the complexity of the exciting developments of innovation, communication is central to the success or failure of any project.