This cover interview is part of the Global Investor Autumn 2022 magazine, available here.
GLMX CEO Glenn Havlicek attributes a significant portion of the company’s success to its ability to rapidly develop and deliver customisable technology solutions, based directly on user-driven needs.
Says Havlicek: “The critical GLMX differentiator is our process - refined over several years and numerous development cycles. The process is simple and highly effective. First, listen carefully and with a critical ear to our clients’ needs. Second, develop quickly. Third, test new functionality with our clients in a real-world trading environment. Fourth, refine functionality as empirical evidence suggests. This is a continuous process for us.”
In practice, this process starts with GLMX clients describing the pain points in their daily manual workflow. The GLMX team digests that information – in this case, having both product and business professionals deeply steeped in the securities financing market is key – then delivers the proposed solution to GLMX’s software development team.
Ilia Mirkin, GLMX’s Chief Technology Officer, adds: “That crisp handoff to our software engineers has been honed by years of our teams working together. Each ‘link in that chain’ appreciates the securities finance market from multiple perspectives. Our software developers understand not only how to build a feature, but also how it will be used. This opens up new possibilities for how our clients manage their business - whether that be speed, scale or unlocking new flows.”
According to Gareth O’Loughlin, GLMX’s VP of Engineering: “GLMX is successful in providing nimble solutions to our clients because of the efficient collaboration across our teams and the direct engagement we have with our clients.”
GLMX’s Chief Product Officer, Andy Wiblin (main picture and above) observes: “GLMX has consistently delivered next-level solutions to our clients. Neither our technology nor our business expertise alone would have given us the ability to out-compete much larger and entrenched competitors, as we continue to do. Together, however, our deep understanding of trading, of technology and of the power of their combination gives GLMX the flexibility to iterate with clients to provide highly effective and scalable solutions.”
GLMX clients represent a cross section of the funding industry as a whole, and include broker-dealers, asset managers, money market funds, sovereign wealth funds, insurance companies, hedge funds, corporate treasurers, pensions funds and securities lenders. Daily, they face each other on the GLMX platform to inquire, negotiate and trade across repo, securities lending and time deposits.
Users with a wide array of specific roles take advantage of GLMX technology – salespeople and traders, portfolio managers, funding desks, middle office and operations staff. Whether looking to secure funding at the lowest possible cost, achieve yield enhancement on their portfolio, source specific collateral, understand potential financing costs on a trade strategy ahead of execution, or simply monitor trade and lifecycle booking, helping clients solve for these potential challenging tasks is where GLMX excels.
Havlicek asks: “Why do GLMX clients constantly ask us to provide solutions to complex problems where others have tried and failed? At the risk of stating the obvious, because we are good at it. GLMX consistently and rapidly delivers as a result of its rare combination of talented engineers (recall that GLMX was founded in Palo Alto, Ca, the heart of Silicon Valley) with deeply experienced Wall Street traders, salespeople, portfolio managers and middle office experts. It is this combined team which produces GLMX technology. Together, we are able to understand the essential characteristics of clients’ multifaceted relationships, then to map those characteristics and bring them, digitally, ‘to life’ - across counterparties, tenors, securities, transaction types and products - via a centralised and standardised web-based interface. Our users consistently report that this process yields powerful, useful and highly intuitive solutions.”
Ilia Mirkin (pictured right) joined GLMX in 2016 as Chief Technology Officer. He holds both BS and MEng degrees in computer science from the Massachusetts Institute of Technology and was recruited by Google immediately out of MIT.
At Google, Ilia was a lead engineer on the Ads Quality Team, which developed algorithms to optimise ad placement and revenue of Google Ads, the largest generator of revenue within the Company. After Google, Ilia became VP of Engineering at Yext, a ‘hyper-local search’ and online brand management company which went public in 2017, and subsequently reached a market valuation of over $3 billion (£2.6bn). Ilia was architect of the ground-up rebuild of GLMX technology in 2017.
“When envisioning the rebuild of GLMX’s platform, I started to appreciate that there are parallels between Google’s and Yext’s approaches to search and GLMX’s clients search for liquidity,” said Mirkin. “I suppose unsurprisingly, what users expect from these three different technologies is similar. Whether searching for the hottest new sneakers or to locate a hard to borrow security, users want fast, relevant and targeted information via a frictionless interface. To that end, the tech stack which underlies the GLMX platform we rebuilt in 2017 supports a premium user experience by substantially reducing the time to market for system and workflow enhancements.”
Not long after the roll out of the new platform, Andy Wiblin joined GLMX as Chief Product Officer. Andy’s role, then and now, is to provide clear internal direction from the point at which business, technology and user experience converge. Wiblin is well-versed in charting the right technology course when faced with heavy and specific client demand as he spent 18 Group, where he was Product Owner for the Repo, Securities Lending and Collateral Management business.
Andy, who received his BA in Computation from Oxford, has been involved in electronic trading since the start of his career. He has observed various attempts to digitise the securities finance space, which had long been ripe for innovation. “What attracted me to GLMX was Glenn’s vision for this market, backed up by a fantastic and experienced business team and a technology team led by Ilia, both of which have a serious capacity to deliver. All the conditions were in place for success when I arrived.” commented Wiblin.
In his chase to achieve significant gains in trading and settlement efficiency, Wiblin has spent hundreds of hours working with traders, salespeople, mid- and back-office personnel, technology vendors, settlement platforms, custody banks and institutional utilities. Considering GLMX’s expansion into other Money Market instruments - time deposits, CDs and commercial paper - many more hours are certainly in his future.
Andy added: “Given GLMX’s role as a top provider of technology for the securities finance industry, I have the privilege of collaborating with clients who are market leaders in order to gain insight into the challenges facing them today. An example of the benefit that this close relationship with the marketplace has yielded is the full suite of lifecycle trade maintenance functionality that GLMX has built.
“This includes substitutions, extendables, evergreens, rerates, floating rate, early term, repricing and partials, all supported with straight through processing. These functions were identified by our clients early on as tedious and error-prone but essential processes, so GLMX completely developed all of it for clients back in 2019,” said Wiblin.
Having witnessed many firms attempting to build these capabilities over the years but failing to gain traction, Wiblin was ideally placed to understand the challenges to adoption and crucially the solutions that are needed which can integrate within the wider securities financing technology ecosystem.
“Over the past several years, many of our users have benefited from the convenience of our lifecycle trade management capability. Most recently, however, as central banks have begun raising short term rates en masse, this functionality is no longer a mere convenience and has become critical to many GLMX clients as they manage massive numbers of lifecycle trade adjustments. We consistently see significant spikes in mid-life activity, which includes rerates, reprices and early term with corresponding new trade bookings, around central bank activity.”
Offering validation of GLMX’s premise that thoughtful features built for one client are likely to prove useful to others, Wiblin noted that the “network effect” has powerfully come into play in this period of rising global rates. “A number of clients had a bifurcated experience around these rate rises – light touch and high accuracy with those counterparts to whom they were connected via GLMX, and very painful and operationally intensive with those who were not. We started getting calls from counterparts in the second set not long afterwards as the message spread through the community. A fantastic validation of our strategy from 2019”.
As GLMX continues to experience rapid growth in its existing offerings of repo, securities lending and time deposit technology, client demand has surged to reinforce the Company’s plans to expand its product offerings to include a broader array of money market instruments. In this context, leveraging GLMX’s engineering capabilities has become paramount. To do so, GLMX brought in technology veteran Gareth O’Loughlin (pictured below right) as VP of Engineering earlier this year. O’Loughlin’s primary focus is to scale and manage a larger software development organisation while sustaining GLMX’s exceptional engineering standards.
Gareth earned a BASc in Electrical and Computer Engineering from the University of Waterloo and an MBA from Columbia Business School, and previously scaled several large engineering teams at Skype and Casper. He joined GLMX from the CTO seat at Gagosian, the world’s leading art gallery. At Gagosian, Gareth oversaw the development of both mobile and web applications for their art dealers. High on his priority list when joining GLMX was enhancing the visibility of the technology team’s positive impact on the people using GLMX’s software.
According to O’Loughlin: “We have a talented team and everyone understands the importance of rapid development and consistently delivering high quality software. The Company does a great job integrating engineering with the business. Because the software development team is actively updated on business progress, they see how their hard work drives platform usage and is changing the way markets function.”
One interesting dynamic which has informed GLMX’s strategy is the importance of design and how technology is being consumed at large. “As individuals we are using consumer applications on our phones everyday and those applications are continually raising the bar on what constitutes a good experience. This is impacting people’s expectations everywhere, including institutional trading applications. The team at GLMX places a huge effort on making sure we consistently deliver good solutions in this regard,” O’Loughlin added.
Another GLMX advantage is that the Company’s technology was built with scalability and flexibility in mind. “The platform was intentionally designed to be highly versatile. The system handles any security with a recognised security identifier, across all currencies, incorporates local day count convention per local settlement depository, handles approved trading relationships, supports rule-based trading parameters such as haircuts, collateral type, and tenors and provides an easily accessible blotter of all trading activity.
“In addition to mid-life trade events, the platform also supports the myriad transaction types across the D2C securities finance market. Plus, the level of customisation which we provide for clients would not be possible if the technology hadn’t been designed with growth in mind,” says Wiblin, “Without a doubt our technology’s versatility has contributed to the exponential growth GLMX has experienced.”
Havlicek concluded: “We are proud of what we have built over the past decade but are even more excited about what GLMX will deliver in the near future. Our clients have been asking for a single, seamless access point to liquidity across the multiple instruments they trade, whether cash, collateral, securities or deposits. We plan to do just that and are confident that we have the right team to achieve it.”
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