2014 — a turning point for system quality?

By Cinnober - 2013.12.27


The year has flown by and it’s time once more to pass along the season’s greetings, take a peek in the rear-view mirror, and a look at next year’s challenges.

For Cinnober, 2013 has been an exciting year, capturing market share in an industry where investment has been on the slow burner for a while. We have worked with leading-edge customers and inspiring individuals who are launching new innovative services. We have widened our offering, introducing our solutions in new shapes to new customer segments, such as banks and brokers. Much of this activity is driven by regulatory change around the world, the opportunities that result and the need to modernize IT infrastructure with more efficient and robust solutions. All of these have combined to make our status as an independent supplier into an even more attractive asset.

I’m very concerned, though, over the growing evidence that there is a great deal to be done in this industry when it comes to system quality. A large number of glitches and trading stops have been eroding market confidence, especially when they occur on the largest and most closely watched markets.

As we see it, one of the reasons that quality has declined is the low level of technology investment following the Lehman crash. Another is that too many actors, when forced to prioritize lower latency, have sacrificed both functionality and quality. This undermines confidence in the industry.

Given the number of RFPs coming in to us from around the globe, we increasingly sense that the tide is turning towards investing in system quality, which is where we will continue to contribute innovations. Having some of the world’s best developers on our team is a great advantage. Recently we presented a revolutionary innovation that captures the best of two worlds: enabling extremely low and predictable latency while not compromising the richness and sophistication of system functionality. As a former developer, this brilliant and elegant solution makes me proud!

On the market side, our expanded offering in clearing and real-time risk calculation is supporting a long-overdue shift in the OTC market. Our friends at MarkitSERV will provide trade and clearing certainty with their venue-neutral hub, Credit Centre, putting it on the right track by fulfilling new Dodd-Frank regulations. Recognition came in the form of Financial News’ “Awards for Excellence in Trading and Technology, Europe”, singling out the “Most innovative new data product/service”.

The Dubai Gold and Commodities Exchange, the first exchange in the world to replace both its trading and clearing systems in a single “big bang”, was recently recognized by FOW’s Awards for Asia for “Best Technology Innovation by an Exchange” and “Emerging Exchange of the Year”.

So what’s to come? 2014 will be an interesting year in many ways. Some major customers are taking their systems into production: LME Clear will be launching Europe’s most modern clearinghouse; BM&FBOVESPA in Brazil will replace its derivatives clearinghouses as a first step – with equities, bonds and forex to follow.

But improving our position involves more than technical innovation and market success. Looking to the future, we have taken the initiative in establishing a financial IT cluster in Umeå, Sweden. As a result of intense cooperation with the municipality, the university and the business community, an initial venture will start in 2014: a unique program combining finance and IT at Umeå University. Our office in Umeå is also a natural home to a much sought-after trainee program within financial technology, called cinCube. This one-year program will secure talents for future growth.

In summary, we are gearing up for an exciting new year, as we know that many financial actors are now reviewing their technology for quality and capacity.

On behalf of everyone at Cinnober, our sincerest thanks for your partnership and cooperation over the past year. We wish you all a happy and prosperous 2014!

Veronica Augustsson


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