Minium Targets Back-Office Processing
Patrick Tessier became chief executive of Minium this month and aimed to expand into providing more services for sell-side back offices before Cinnober Financial Technology, the Swedish parent of the risk and post-trade technology provider, received an approach from Nasdaq.
Tessier met Markets Media before the US exchange group announced last Friday that it had made a $190m (€162m) cash offer for Cinnober, an independent provider of technology solutions for the finance industry.
He told Markets Media: “We will expand into providing back-office solutions and go beyond straight-through processing with the smart tool supported by cloud technology. We aim to provide instant post-trade data and make it usable for clients.”
Tessier continued that Minium has been using cloud technology from the beginning as it has a light footprint for clients, allows them to carry out complex calculations more quickly and increase agility through using open source solutions. He expects there will be a steep acceleration in the use of cloud technology across financial services in the next 18 months.
“Clients are beginning to realise they need scalable technology, which is instantly backed up, and that they need a real-time back office,” he added. “They will be exposed if they continue to rely on traditional server technology.”
Becoming a subsidiary
Cinnober launched Minium as a subsidiary in October last year to provide real-time post-trade technology and services to international investment banks – alongside subsidiary Simplitium for reporting services; and another unit for market surveillance.
Veronica Augustsson, who was Cinnober’s chief executive at the time, said in a statement: “Cinnober introduced real-time clearing to clearinghouses and is today the overall dominant supplier. We are convinced that the banking sector also has a huge need for real-time clearing, risk and post trade services, as they can be used to modernize and streamline processes that are currently ineffective and costly.”
Augustsson, who had been group chief executive since 2012, left in August this year and was replaced by Peter Lenardos. He had been Cinnober’s group chief financial officer since June this year after joining from Royal Bank of Canada where he was a well-known analyst.
This month Tessier was named Minium chief executive, alongside John Yonker who became chief executive of Simplitium. Before joining Cinnober in February last year, Tessier was global head of cleared derivatives and agency collateral operations at Citibank for seven years.
Lenardos said in a statement at the time: “Under Patrick’s guidance, in under 18 months since its inception, Minium has designed an innovative real-time risk management and post-trade technology solution, grown to nearly 50 employees and announced its first client, Marex Spectron.”
Minium announced in June that commodities broker Marex Spectron would be consolidating a number of systems it currently uses into a single platform for real-time risk management.
“The Marex Spectron announcement has accelerated engagement with clients on our cloud based real-time risk monitoring solution, and our module for real-time funding requirement tracking has resonated particularly well with the industry – we are seeing a real momentum around this,” added Tessier.
The new platform will also support the growth of Marex’s agency business in exchange traded derivatives and foreign exchange. For example, Marex will be able to perform what-if simulations for initial and variation margin over 24 global clearing houses. Tessier explained that clearers currently call margin intra-day from their members using Swift messages to instruct payment or securities movements.
“Tomorrow we foresee integrating our solutions with distributed ledger technology once a consensus emerges around this technology so that two way margin calls between members and their own customers can be seamlessly performed in real time,” he said.
Tessier continued that in one year’s time Minium would like to be diversified across asset classes and be well under way with a back office pilot.
However last week the board of Cinnober Financial Technology unanimously recommended that the public offer made by Nasdaq should be accepted.
Adena Friedman, president and chief executive of Nasdaq, said in a statement that the combined intellectual capital, technology competence and capabilities of Cinnober and the US group’s market technology business will expand the breadth and depth of its fastest growing division.
She told a conference in the summer: “Moving the markets into the cloud to globalize participation, leveraging the immense power of data to empower consumers and investors, integrating the blockchain to facilitate instant settlement and ownership tracking, and the potential for digital currencies to accommodate the flow of capital, will all combine to change the nature of capital markets — just as it will the nature of global commerce.”
Nils-Robert Persson, co-founder and chairman of Cinnober said in statement: “Since co-founding Cinnober in 1998, Cinnober has been on an exciting journey and has become a leading supplier of financial technology providing services to exchanges and trading houses worldwide. I really believe in the strategic logic of combining Cinnober and Nasdaq’s Market Technology business also as it reinforces the strong technology foundation in Sweden.”
Nasdaq Nordic operates an exchange in Stockholm which is an analytics hub for the group.
Lauri Rosendahl, senior vice president for European equities and president of Nasdaq Nordic, told Markets Media in June: “Within the group we are the analytics hub for market data and we are developing datasets for both the US and Nordic markets. We are looking at new sources of data combined with machine learning algorithms to find intelligence for investors and provide value-added services.”
Last year Nasdaq Nordic’s exchanges in Stockholm, Copenhagen, Helsinki and Iceland implemented machine learning within Nasdaq’s Smarts surveillance technology to analyze data and notify staff of abnormal patterns. Rosendahl said a number of Nasdaq’s global exchange and regulator clients are now implementing the Smarts offering with integrated machine learning. Nasdaq Nordic has also been running a number of proof of concepts for distributed ledger technology.
This month Nasdaq announced that its market technology division has expanded its Nasdaq Financial Framework technology into supporting banks and brokers to completely outsource trading infrastructure and operations, including regulatory reporting.
Carl Slesser, vice president, market technology at Nasdaq, said in a statement: “In launching this new offering, the sell-side industry can now leverage the Nasdaq Financial Framework for a range of endeavors, including setting up and running a full-scale, multi-lateral trading venue to addressing regulatory obligations for internalization. We have built the platform to enable these services to be both deployed in the cloud and in our data warehouses, which allows for flexibility in terms of initial capacity and growth based on individual client requirements.”
The deal shows the cloud is ready for the most mission-critical applications.
The expanded commitment will bring Nasdaq closer to moving its markets to the cloud.
RQD said it offers the first clearing platform built entirely on cloud-native, real-time technology.
Existing financial data management and analytics solutions are based on legacy technologies.
The RQD platform supports U.S. equities, options and ETFs.