InTick has had a busy year as the platform that automates futures block trading was chosen for the latest IA Engine Innovator Programme from The Investment Association and also went live during the June ICE Gilt and Eurex fixed income futures rolls.

Sarah Timms, co-founder and chief product officer at Intick, told Markets Media that the process for trading blocks in listed derivatives is very manual and time consuming, so it is difficult for the buy side to find liquidity. Historically, buy-side firms have had to call a number of executing brokers to find natural liquidity for a large block and then manually track multiple conversations and responses.

Timms said: “The process was screaming out for automation, electronification and innovation.”

Intick is not a trading venue but displays a transparent order book of intentions to trade from market participants, so it aggregates liquidity.The platform supports all-to-all trading as well as request-for-quote (RFQ) price discovery via fully automated, front-to-back listed exchange block trading.

The firm did a lot of research of the end-to-end workflow for a portfolio manager in order to build the network and ensure that the buy side could integrate the platform into their workflow, which is necessary for adoption, according to Timms.

James Goater, chief executive of InTick, said in a statement: “InTick empowers trading participants with actionable liquidity insights from an automated, simplified and transparent platform that centralises traditional processes and workflow information, thereby removing the cost and complexity of futures block trading.”

Ben Parker, co-founder and chief operating officer at Intick, told Markets Media that once the intentions to trade have been matched, messages are sent to the executing broker of both counterparties. Once both brokers accept the messages, they create a legal trade on an exchange and Intick provides the necessary post-trade data back to the end clients to allow straight-through processing.

“Asset managers didn’t have direct access to market maker liquidity,” added Parker. “Intick gives them a path to access to a liquidity pool that was not available to them directly.”

Intick went live in June this year during the ICE Gilt and Eurex fixed income futures rolls, where there was natural concentration of liquidity, and as a result of requests from market participants. A tier one investment bank was the first execution broker on both rolls, according to the firm.

‘We came to market in October last year so the full onboarding of a tier one investment bank feels like a success,” said Parker. “We have quite a few that are in the pipeline that are not far behind, so we feel there is genuine interest.”

He added that a combination of hedge funds and asset managers across jurisdictions provided liquidity for the order book for a large percentage of the roll period. Parker  continued that a significant number of larger, more sophisticated hedge funds and asset managers are actively onboarding onto the platform  and or are in the pipeline to join.

Timms said the intention is to expand the platform to include orders for more derivatives contracts, including options, at more exchanges.

“We went live in the rolls but the technology is there to be used daily by users,” she added. “We want to support portfolio managers in all of their trading needs,

Parker added that as well as challenges around block liquidity, there are also other niches in the market where market participants are struggling to find pockets of liquidity.

“We see opportunities for Intick to solve those problems without a great deal of additional development,” he said.

The firm will scale the technology to cater for as many use cases as possible, according to Parker. She added: “We are focused on making sure that we are solving the most pertinent problems and daily pain points, and then adoption almost takes care of itself.”

Stephen Bruel, who heads up the derivatives and foreign exchange practice on the market structure and technology team at consultancy Crisil Coalition Greenwich, said in a report that while parts of the exchange-traded derivatives workflow are automated and mature, the process is still rife with inefficiencies due to the ecosystem of market participants and the number of handoffs between those participants.

Bruel said that for the sell side, futures can be a low-margin flow business so scale and efficiency are necessary to protect margin and mitigate risk. For asset managers, end-clients are focused on fees so managers need to wring costs out of as many processes as possible.

“Technologies that enable new processes and new ways of identifying and mitigating costs will help this industry thrive,” Bruel added.

Parker believes technology innovation in the futures market has been quite limited over the past few decades. He said: “”People are seeing there’s a genuine innovation coming through in a space that doesn’t get that very often. I think it has generated natural excitement.”

IA Engine Innovator Programme

In March this year The Investment Association, the trade body for UK asset managers, revealed that Intick was one of the five firms selected for the latest IA Engine cohort, its accelerator programme that connects fintechs with the fund management community.

During a twelve-month programme cohort members receive support and mentoring from the Engine Advisory Panel, a group of experts from across the investment management industry, as well as opportunities to showcase solutions at industry events.

Gillian Painter, director of Engine at the Investment Association, said in a statement that Engine’s latest Innovator and Advanced Access Programme cohorts highlight the extensive value new technologies can bring to the investment management industry.

Timms said: “Being selected by the trade body for our customer base is a huge endorsement that Intick is delivering a solution to a known market problem. It’s really exciting for us and can accelerate our growth.”