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At the launch of SaxoTraderGo today in Paris, the discussion has progressed to the importance of fully adaptable platforms, which empower the user.
Matteo Cassina, Saxo Bank Global Head of Sales and Platforms, raised a very poignant subject in that leading edge, technology focused firms have an infinite advantage over banks. “Everything is going vertical with banks” he explained.
“If you take the metro in Paris, Western Union is advertising transactions between North Africa and France, it is basically currency in the cloud. They say that they will let people swap their money in milliseconds rather than waiting days for it to arrive via a legacy system. Are you going to use a legacy system or a new, advanced system? I think banks should be worried, they have three to four months to catch up, but that is all.”
“With regard to the API, it is important to state what this means. It is good for traders, but it is also good for people who want to build their own front end” said Mr. Cassina.
“The GUI, which you see when you switch your device, is fully adaptable. We provide the source code for SaxoTraderGo, and the developer and client can decide what to do with it.”
“We have some clients which are only interested in futures trading, and are specifically interested in designing their screen for futures trading. This is revolutionary. We are the first to be truly open in this respect. This might
be better than the default interface. They might be able to sell this product and it may be more attractive.
Mr. Cassina continued: “We think banks have a great future in this respect. We see ourselves as the exclusive supplier for banks. We also think it is important to establish partnerships with people who want to develop their own product.”
Your very own trading platform, designed by you
He further stated that “We use an open API to develop SaxoTraderGo. This is the benefit of the system. When we set up our system, we decided that we would immediately go for something that can be used for iPhones and iPads.”
“From the very outset we began the other way round. Banks and other institutions should think about mobile devices from the outset. We know that mobile terminals are less highly secure than desktops in terms of passwords, and that if you lose your cellphone or tablet then there is a security issue.”
“This requires institutions to change their approach. You need to convince compliance officers that it is
worth taking the risk to be focused on mobile devices.We are agile and small compared ot BNP or SocGen, therefore we can move between more inertia laden banks. This is not easy, it takes years of working with developers and some very committed in-house collaboration” explained Mr. Cassina.
Mr. Cassina then made the very valid point that customers are often very much more reluctant to change the company with which they bank, compared to changing the way they shop for other services or products.
“Changing a bank is not the same as changing a newspaper or their smartphone” said Mr. Cassina. “Customers do not change banks the way they change other commodities. Banks are pretty much going belly up but if you look at the next 5 or 10 years, when they may not have the power to invest in market systems like ours, then it may be a different matter.”
“Imagine if i am a customer of a large institution like BNP Paribas SA (EPA:BNP), or a small bank in Monaco, I would have to be able to buy shares in Apple via a tablet or phone, it would be the same process regardless, otherwise it is ineffective” stated Mr. Cassina.
“There is no way a customer wants to phone orders. Customers want to trade on the mobile device from home without going through the bank. With our open API, we want to be the equivalent of Intel Inside, therefore Saxo Bank will be able to have hundreds of banks behind the screens for the trading of shares” he enthused.
“If you look at new technologies, apps will dominate as far as margins go, there are trading systems which could charge clients 20 or 50 pips, but the banks systems would be connected to the mainframe system. Now you have Citibank with payment systems, but it is only in cents, and if someone wants a 15 Euro commission for trading 1 Euro, then it wont be effective in future” he said.
Saxo Bank co-CEO and co-Founder Lars Seier Christensen then added “Banking is a little bit special. It is harder to revolutionize, even sitting in a house like this, which is a start up incubator.”
“The approach to financial technology has many hurdles. If you are a couple of smart guys in a garage, and are going to revolutionize something, you will not start with a bank, and go to the regulator and negotiate for years. You are going to do something much easier and more innovative. This is very good for incumbents but it is not good for the user and customers of banks that they dont have the same innovation” said Mr. Christensen.
“Our specialist abilities in new types of products is a boon, because banking has innovated very little compared to our sector. Technology is accelerating, peoples trust in ability to do things themselves is increasing. If anyone has a strong wish to succeed with their portfolio, its you. I think alot of things will change and technology will play a major role.”
Mr. Christensen continued: “If you want to be in the online game and want to be a significant force, you have to be competitive. What is left is intelligence, and that can be integrated in the platform to help.”
“What if computers are way smarter than humans in the future? Clients have lost trust in the monolithic banks talking down to their clients, and therefore the days of that are long gone. Clients want to be part of the experience. There was a great consumer poll in the US where 140,000 people were asked what they want to do to better themselves. 75% said they want to understand their finances. That is a huge responsibility that so many people feel uninformed. I cannot see 30 years into the future, but i am sure that some of the trends we are discussing will drive things for the next few years.”
“I want to be on a panel that educates schoolchildren about how to understand the economy. Would you pay 1000% interest rate for a few drinks on a Friday night if you really understood? No, but if there was a way to educate children how the financial world works, it will be great” concluded Mr. Christensen.
Mr. Cassina then revealed: “I want to explain what happened to me. I worked for a big investment bank, and we often met the CEO of companies, we had analysts which worked for big companies and spoke to investment funds to get them to try to invest in those companies.”
“They spent millions in research, They were smart kids who came from Harvard,and other Ivy League universities. They would come and talk to CFOs, and the question was often around what the source of information was. 10 years ago, the answer was Google. You had shareholder presentations, videos all on Google.”
“If I observe how modern technology is used, many seem to be using it on the go, and I don’t see any problem with trading from a watch, if it is the closest thing at hand, which it is!” – Lars Seier Christensen, Saxo Bank
“The fact that today someone can watch the video of the founding chairman of a firm before a public offer, he knows that he does not need to talk to a private banker who doesn’t speak English properly, and to whom the information trickles down somehow. Nowadays we have 20,000 to 30,000 traders in France, however it is now possible that the Y Generation (people who grew up in the 1990s) will now go and watch a video.”
“I bought Apple shares by going onto a site, watching the Merrill Lynch analyst, and the stock went from 5 to 90 dollars, the analyst told me to sell, I sold it at 600. I wasnt a genius but I saw people sitting in the streets waiting and were sleeping outside the shop. This is how you tell whether this will be a block buster, by seeing it with your own eyes” concluded Mr. Cassina.
Andrew Saks-McLeod of LeapRate then asked the executives if interactive new media will ever take the place of the desktop platform entirely.
Mr. Cassina responded by stating “It is very important to be scalable. You have to be able to use technology to speak to customers. That is why it is important to have all platforms interconnected, so that every morning we can broadcast to our customers.”
“A very important matter is that the working population has to start saving money especially in France, where you cannot expect the government to fund traditional products like pensions, therefore we have to provide technology which will empower customers. Look at a private banking customer who may have 10 million with a bank, and the banker invite a customer to play golf. I do not want to play golf with the manager! I want an interactive system which gives me the full info immediately. Human beings are not scalable, and cannot provide info to 10,000 people at the same time, when it is critical.”
Mr. Christensen concluded by explaining that “I think it is very hard to predict the future, but if i look at myself and my own family, I have a good home office but i prefer to sit outside in the garden, and my kids have hardly any desktops. I don’t think this world is going to look the way it did in the past, we are not far away from nanotechnology, i think this is something that will change quite dramatically and if I observe how modern technology is used, they seem to be using it on the go, and I don’t see any problem with trading from a watch, if it is the closest thing at hand, which it is!”
Photograph from left to right: Matteo Cassina, Global Head of Sales & Platforms at Saxo Bank, Romain Grosjean, Lotus Formula 1 racing driver, Lars Seier Christensen, co-Founder and co-CEO of Saxo Bank