Mosaic Looks To Standardize FICC Metrics

Shanny Basar

Matthew Hodgson, chief executive and founder of Mosaic Smart Data, said its partnership with J.P. Morgan shows that the bank believes the fintech firm can provide metrics which will become the standard in fixed income, currencies and commodities.

Last week Mosaic Smart Data announced that MSX, its real-time data analytics platform has been deployed by J.P. Morgan across the bank’s entire global fixed income sales and trading division.

Hodgson told Markets Media: “In my previous roles at Deutsche Bank and Solomon Brothers I found it impossible to get a consolidated view of data on all trades with one client across all products.”

He launched Mosaic Smart Data to make it easy for the banks to unleash the value in their trade data using technologies such as predictive analytics and artificial intelligence. The data is presented visually and using natural language so that banks can understand past client behaviour and improve service, and profitability, by anticipating their needs.

Matthew Hodgson, Mosaic Smart Data

“Mosaic Smart Data is like a financial GPS to see all client interactions and receive intelligence you can use in real-time to map the road ahead,” added Hodgson.

McKinsey said in a report this month that banks cannot afford to wait any longer to extract the potential of digital to industrialize their operations. In the study, The Phoenix Rises: Remaking the Bank for An Ecosystem World, the consultancy said that if banks use new tools and build skills in digital marketing and analytics, the industry could add about $350bn (€300bn) to their collective bottom line.

“In capital markets businesses, new ideas in sales and trading include client profitability dashboards that calculate the fully-loaded cost of coverage, including capital consumption and allocated operations costs, as well as new tools that track inventories more closely to better match buyers and sellers in illiquid asset classes and suggest the next product to buy,” added McKinsey.

The report continued that digital-forward banks go much further than others to personalize their outreach to potential customers by using analytics to identify the likely next product they will buy for thousands of micro-segments.

“Propensity models and other tools not only enhance revenues, they also save on customer acquisition,” said McKinsey. “Analytics also help banks improve client profitability through better pricing.”

Hodgson said: “We do not believe that jobs will be replaced by code. Our technology is designed to empower traders, as it gives reasons to call clients.”

Mosaic Smart Data is the first graduate of ‘In-Residence’, an initiative launched last year by J.P. Morgan for technology start-ups in financial services. Sanoke Viswanathan, chief administrative officer of the corporate and investment bank at J.P. Morgan, said in a statement that the bank reviews hundreds of fintech companies for the  programme but only partners with a handful.

“The partnership with J.P. Morgan shows that they believe we can be the standardized metrics in FICC,” said Hodgson.

He continued that the system was delivered to J.P. Morgan five weeks after work on the proof of concept began and the firm assisted the bank in data cleansing their transaction data.

“They can now analyse their business at the transaction level,” added Hodgson. “Our architecture can analyse more than 20,000 transaction messages a second, so can analyse a big foreign exchange book in real time.”

Troy Rohrbaugh, global head of macro at J.P. Morgan, said in a statement: “Having a more holistic view of trading data will improve our service delivery for clients. The Mosaic platform integrates securely with our existing technology infrastructure, and enables our teams to quickly make better informed decisions.”

Hodgson said that Mosaic Smart Data is about to start another project with a large Tier 1 bank and there is an enormous amount of interest in the pipeline.


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