Electronic trading's prominent place in the investment banking landscape may be a relatively recent development, but a select few have overseen its growth from rudimentary and misunderstood roots more than 20 years ago to the capital market straddling behemoth it is today. Tim Wildenberg is one such individual; from a trainee or âblue buttonâ position at the London Stock Exchange and a role he describes as an âearly market data systemâ he progressed to a position with Barclays in the late 1980s and early 1990s working in Parisâs then relatively advanced electronic markets, which led to his co-founding the Financial Information eXchange (FIX) electronic communications protocol.
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From here, he embarked on a lengthy stint at UBS, where, as head of direct execution for Europe, he developed the Swiss bankâs electronic trading business â overseeing its development into one of the top algorithmic trading houses in the region â before calling it quits after almost 14 years. Now, with three months of âhelping his children with their maths homework and mowing the lawnâ under his belt, he has re-emerged at Citi to head its Europe, Middle East and Africa electronic trading team, the latest in an ongoing reshuffle and programme of investment designed to rejuvenate its electronic trading business following the ravages of the crisis.
For Mr Wildenberg, this was too good an opportunity to pass up: âI realised I enjoyed building things more than I enjoyed running them. The appeal of joining Citi was the opportunity to use my experience to create an offering that would be judged best-in-class by our clients. Knowing what has come before, itâs a chance to improve on what I created last time round.â
Citi's comprehensive platform
But it was not a case of building from scratch, he says. Prior to his arrival, Citi had invested heavily in its electronic trading infrastructure, so Mr Wildenberg inherited a comprehensive platform. âMy biggest fear was that when I arrived here was that Iâd have to roll up my sleeves and write algo code, but luckily that was far from the case. Citi had a great many of the building blocks in place prior to my arrival, enabling me to focus on tailoring our offering to best meet the needs of our clients.â
Instead, he adds, the bank has perhaps not marketed its newly improved offering aggressively enough. As a result, he sees his new role as a process of organising the constituent parts of the business into a cohesive whole. âMy job is to draw on my experience of what clients like and donât like, what sort of service level and product set they expect, how we should be behaving, how we should run the team and how we should communicate across regions. All of the various ingredients are here; I need to combine them in the right way.â
But that does not mean there are no technology issues to take care of. Like every big bank, Citi has a number of pieces of legacy infrastructure, Mr Wildenberg says. As a result, one of his key IT priorities is getting rid of, and updating, outmoded elements, including a trading system that sits on the electronic sales trading desktop and has now become surplus to requirements. âFlow goes through it. The fact that itâs there doesnât hurt anything, but it would be nice to say âweâre wasting time with itâ and get rid of it,â he says.
Citiâs roll-out of a global transaction cost analysis platform is also high on the list of IT jobs, he says. Currently, every region has its own system, but a master project integrating all of these parts is under way. Similarly, immediately prior to Mr Wildenbergâs arrival, a global code merge was completed, ensuring that each region operates in the same electronic language. This should allow the team to maximise its use of resources, he adds. âIt gives you massive power and effectively doubles the size of your development team, because the guys in the US can fix problems for the European team and vice versa. It also means that one development can be reused elsewhere.â
Using third-party technology
A key IT difference, when compared with his former employer, is Citiâs willingness to make use of third-party technology, particularly when it comes to connecting with Europeâs multifarious trading platforms. âAt UBS we had lots of exchange memberships, and we managed and built everything ourselves. Here we do some of that too, but weâve been a bit smarter about using vendor gateways, which saves time.â
Now, he says, the chance to add value comes from intellectual rather than physical capital. âYou have to be smart around your algo engine of course, but do you actually need to build your own interface to [Deutsche Börseâs electronic trading platform] Xetra when you can buy it off the shelf? Thatâs less clear, because these things are starting to become commoditised.â
This trend may make some IT tasks easier to achieve, but as European markets fragment and become ever more complicated to trade, technological barriers to entry are growing, rather than tumbling down. From Mr Wildenbergâs point of view, however, that may be no bad thing. âThere are only a small number of people who have made the investment to be able to trade efficiently in a complex market, but thereâs a much bigger pool of people who need that technology and those skills but donât have them,â he says.
As a result, he adds, the traditional investment bank customer base is broadening to include more banks and brokers alongside buy-side firms keen to access markets and services alongside clearing and custody services. âIf we go to a mid-tier broker we can offer them a package that effectively allows them to outsource huge chunks of their business to a bank like us, and thatâs one of the things Iâm particularly excited about.â