Denmark’s Saxo Bank is 50% bank and 50% technology company, says its chief information officer. He tells Dan Barnes why this hybrid has been so successful.

An online investment bank, established in the 1990s with 30% of staff in the IT area – does that sound like a good idea? It does if you are Ole Rossing, CIO at Saxo Bank. Founded in 1992 and granted European bank status in 2001, Saxo could be a model for the future of financial services.

It certainly is not a model of the past, says Mr Rossing. “Twenty years ago, HP and IBM were running the technology in banks on long-term contracts. In many places it is still the case, banks are running on these big systems. We grew slowly and added servers where necessary – we have 250 now – but we never needed mainframes or external people to tell us how to set up our storage system.”

While avoiding the legacy technologies that proliferate elsewhere, Saxo has retained a can-do attitude founded on its internal ability to construct systems, only diverging when resources cannot be found within Denmark.

Saxo became involved in outsourcing two and a half years ago when IT skills for a project were unavailable in-country. Instead it teamed up with Russian company RecSoft, which supplied additional systems – and the two have had a good working relationship ever since. Noting the basic difference in motivation of outsourcing deals – “they want as many hours of medium-range staff work they can get, we want fewer hours with senior staff” – Mr Rossing decided to form a new company, Saxosoft, to make senior staff available to the bank at a reasonable price.

Furthermore, by selling technologies to rival banks in the market and ‘white labelling’ the trading platform (allowing other banks to use it), Saxo is a different beast to its competitors, he says: “We are 50% a bank and 50% a technology company.”

Discussing a new trading platform to be rolled out this month, Mr Rossing clearly is keen to prove the technology’s value for customers. The bank’s ongoing projects are around algorithmic trading and platform access, playing directly to market demand.

“We can ensure that you make your trading decision based on the best information we can supply. We are working on some tools whereby the client can choose a strategy and the system will trade on that strategy,” he says.

 Any device, anywhere

 Specific markets are increasing demand for additional functionality. For example, Asia is asking for an ‘any device, anywhere’ platform that Mr Rossing intends to supply using thin client technology.

“Clients don’t want to download a programme, they want to be able to trade on anything, anywhere – on the train, using a mobile phone – and they want everything to end up at the same account and then, when they come to audit they want to have access to a more detailed view,” he says, adding that several big partners have signed up for the initial trials.

The bank’s youth enables the IT function to spend a lot more time on developing new systems than is commonly found within financial services. Where the majority of CIOs bemoan the 80% of their spend that goes on running the bank’s IT rather than changing it, Mr Rossing has an envious level of new developments. “Around a third of our income is spent on IT and two-thirds to three-quarters of that is then spent on innovation rather than running the bank. Our maintenance costs are not that high because we have pretty smart systems,” he says.

The bank will continue to expand through its white labelling programme. Mr Rossing sees this play as the route to a global market: “The banks we sell our technology to compete with us. As their customers demand more and more online [the bank] eventually ends up at our door. They get the trading system, the customised website, the back-office interface, the transfer of trades, reconciliation – the full suite.”

Being the power behind the throne suits Saxo Bank just fine, he concludes. “We like it to be that way, they can service local clients much better than we can. Their clients’ trades are routed through us.”


2001: Executive director and CIO, SaxoBank (formerly Midas Fondsmæglerselskab)

1998: Head of IT, Midas Fondsmæglerselskab

1993: Senior system engineer, product manager at Fls Automation

1988: System engineer, Fls Automation

1985: Process engineer, F L Smidth

1983: System developer at F L Smidth 


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