The successful platform should partner with best-of-breed technology providers to deliver workflow support, rather than seeking to deliver everything out of its own toolbox.
We live in an age of platforms. Across our personal and professional lives, platform businesses such as Amazon®, Apple® and Uber have transformed the way we shop, communicate and travel. Unprecedented efﬁciencies and innovations have swept away outdated platforms and fed the success of this new breed of networks. So too in trading, market participants are increasingly reliant on innovative platforms, not only to source and distribute liquidity, but also to manage critical trading workﬂows.
Michael Chin, co-head of Trading at Thomson Reuters, says, “With less available resources than in the past, our clients want solutions that will help them to connect to their counterparties, ﬁnd liquidity, trade and prove best execution. They want a platform strategy that allows them to expand across borders and markets and to communicate with customers, partners, suppliers and their own employees.”
At their most fundamental level, platforms link consumers and providers, creating environments in which additional value can be delivered beyond the traditional bilateral relationship. In the case of Uber or Airbnb, for example, the platform creates a network that allows drivers and property owners to connect quickly with the passengers and travellers most suited to their speciﬁc service and location.
Critically, the most successful platforms offer added value without necessarily owning all of the assets they deliver. By creating networks, they facilitate access to the most effective goods and services to ﬁt the requirements of end users, even if those goods and services come from third parties. Small independent service providers can ﬁnd customers through a large, cross-border platform, as long as they are offering credible value at competitive cost.
This is what Chin describes as an open platform business, which “acquires, connects, matches and enables networks of providers and consumers to do business.” While Consumer Technology may have led the way in this ﬁeld, the Financial Services sector is catching up fast.
Through the Eikon App Studio, launched in 2016, Thomson Reuters offers integrated access to a range of handpicked providers that deliver best-of-breed services in their particular niche of the trade life cycle.
“Clients still want some choice of provider for pre- and post-trade services, but they want that choice as part of a platform offering, so they need us to stitch everything together in one place,” Chin explains. “We feed our data and content into chosen applications so that even though they’re using different vendors, there is a degree of consistency across the entire workﬂow.”
Among the companies that have integrated their applications into Eikon App Studio are ChartIQ, which specialises in professional ﬁnancial charting and data visualisation, and OTAS Technologies, which delivers equity analytics that identify and ﬂag exceptions in the stock markets in real time.
Both companies believe what they offer is additive and complementary to the range of data and analytics already available through Thomson Reuters Eikon®. By partnering with Thomson Reuters, they have been able to very quickly expand their distribution and beneﬁt from the company’s global reach, while Thomson Reuters can add an additional, highly specialised strand to its Eikon offering.
Dan Schleifer, co-founder and CEO of ChartIQ, says, “Through this partnership, any Eikon user can access our charting and immediately see the full range of Thomson Reuters data displayed in a highly interactive way, with the ability to analyse and manipulate the data as they see ﬁt. It has effectively created a ‘data playground’ within Eikon, where users can combine their own data and research with that of Thomson Reuters and then use our charting to visualise it.”
Similar beneﬁts are derived from the partnership with OTAS, which prides itself on delivering actionable equity market content rather than simply bombarding the user with overwhelming reams of data. The key is to identify exceptions where something unusual may be happening in the market so that users can determine where best to focus their attention.
Given the pressure on desktop space, the integration with Eikon has allowed OTAS to penetrate many more users, giving them access to functionality they otherwise would not have had. It also means clients don’t have to deal with multiple connections or the burden of passing data between systems, but can access a range of useful functions through a single integrated portal.
“Users leveraging the Eikon platform can take vast volumes of data and information from multiple sources and process that in real time through OTAS without needing a separate connection,” says Charlotte Wall, head of Sales and Marketing at OTAS. “This is a highly effective way of accessing our service without having to build a case for an entirely new desktop system.”
Additional beneﬁts can be gleaned from these partnerships when it comes to paying for particular services, as an integrated platform that combines multiple providers offers the possibility of paying for everything in one place rather than having to deal with a large number of contracts and invoices from multiple providers.
“Market participants clearly stand to beneﬁt from this best-of-breed approach where they get access to a number of pre- and post-trade partners,” Chin says, “and they also want a single place where they can go for contracting and billing rather than having to deal with each ﬁrm individually.”
For ChartIQ, the basic version of its service is currently offered free of charge through the Eikon App Studio, but users who decide to go beyond the basics and seek customised data and analytics would then enter into a direct relationship with the ﬁrm. In this way, the Eikon partnership effectively acts as a marketing tool for ChartIQ’s more advanced capabilities.
Our clients want solutions that will help them to connect to their counterparties, ﬁnd liquidity, trade and prove best execution.
“Providing the basic version for free was a new model for us because we wanted people to see it, try it and understand it, and then consider the possibility of breaking outside the box for more customised charting,” says Schleifer.
For other Thomson Reuters platform partners, the exchange of data is even more fundamental to the partnership. London-based BestX, which launched in 2016 to deliver independent Transaction Cost Analysis (TCA) in the FX market, derives substantial beneﬁt from the FX data it sources from Thomson Reuters.
Meanwhile, Thomson Reuters clients also get direct access to a fast-growing and respected source of independent FX TCA.
Pete Eggleston, co-founder and director of BestX, says, “As an independent TCA provider, data is critical. Through our partnership with Thomson Reuters, we not only have access to market data from the Matching platform, but we can also source data from restricted emerging markets where Thomson Reuters has been active for longer than many other ﬁrms. We believe we have strong analytics, but they will only ever be as good as the underlying data.”
Critical as these partnerships may be, they must not detract from the core business of a trading platform, which is usually to enable the most effective sourcing and distribution of liquidity and market data. The successful platform will not only partner strategically with selected workﬂow providers, but it will also develop its core market connectivity across asset classes so that it can deliver valuable liquidity to its clients.
In exchange-traded equities, Thomson Reuters transacts roughly 40 billion shares each day across 800 banks and brokers and 6,000 buy-side ﬁrms. In FX, the ﬂagship Matching platform boasts one of the largest interbank liquidity pools, with a particular strength in Commonwealth and emerging market currencies, while FXall is well-established as a go-to platform for bank-to- customer FX trading. Finally, in ﬁxed income, more than $250 billion is traded on a daily basis through the Thomson Reuters-owned Tradeweb® platform.
“The breadth and depth of content and liquidity on our platforms is unparalleled in the industry, with signiﬁcant volume traded daily across asset classes,” Chin says. “The seamless workﬂow we have enabled through our partnerships adds operational efﬁciencies because traders don’t need to constantly swivel from one screen to another, thus minimising errors and reducing risk.”
For more information, visit: financial.tr.com/partners