The tech journey

The Sellside has led on tech innovation, with its bigger balance sheets and larger budgets to fund internal teams and build in-house tools. The initial strategy was ‘build not buy’ due to the vendor pool being limited as they needed to be established and have a proven record of revenue. Only larger companies like Sunguard, Smartstream, IBM, HS Markit, and Fidessa were in the market.

In-house tools were often built on old technology which over time required patches to make them safe in the short term but posed potential issues in the longer term. After years of building, the ghosts of now-defunct applications are strewn throughout financial services organisations.

Over time, due diligence and procurement rationale was adapted to allow smaller companies to compete for business. Banks began creating their own innovation hubs to help them discover new tech applications, and strategic venture arms were formed to enable them to benefit from reduced risk, input on product development and interoperability, and have skin in the game to realise potentially huge upsides from their investments.