An Interview With ICE CTO Mayur Kapani
Intercontinental Exchange (ICE) CTO Mayur Kapani oversees the global ICE technology infrastructure, which includes all ICE futures exchanges and clearing houses, and he provides guidance for technology that supports the New York Stock Exchange and ICE Data Services. In our interview, Mayur shares key trends and insights he's seeing in his role, including the unique relationship between technology and data, the tech trends he’s seeing in the markets today and the role participants are playing in developing the future of trading technology.
Q: What is ICE’s role when it comes to developing technology for the global marketplace?
We develop and deliver start-to-finish technology and services to support companies’ mission-critical needs for trading, clearing, data and connectivity.
When ICE was formed just over 16 years ago, the first version of the ICE trading platform was launched to support electronic trade execution. It was developed in response to a need for increased access and transparency in the formerly opaque and fragmented energy markets. Since then, we’ve built technology to support the full range of services that accompany execution and risk management capabilities, including clearing technology, risk assessment tools, options analytics, instant messaging and a robust data offering – all in response to the evolving needs of market participants.
Today, we have 11 exchanges, 6 clearing houses and a robust data business – a big expansion from the initial 1 trading platform we had until 2007. We develop and manage technology that supports the needs of all the different market participants who interact with our exchanges, clearing houses and data business. Our investment in system messaging technology, which has enabled a 705% increase in message volume between 2010 and 2016, is one example where we’ve been able to streamline a core business function for our customers. Our technology focus is always on bringing increased efficiencies to many of the once-manual workflows, while finding new ways to drive opportunities for our customers in new markets and products.
Q: What’s the biggest technology trend you’re seeing in the marketplace right now?
The demand for access to data is without a doubt one of the biggest trends shaping technology strategies right now. High-quality, trusted data is more in demand than ever thanks to regulatory requirements for independent valuations, the standardization of products for electronic trading and clearing, increasing indexation and passive investments, fragmentation in the markets and the need to trade with algorithms and quantitatively-driven programs. That increased need for data is sparking a related need for technology that organizes data inputs, supports real-time market analysis and delivers access and connectivity to global markets. Tied to demand for access is the demand for customization; firms want to be able to view and interact with the data to develop new models, strategies and analysis.
The technology efforts required to meet the rising demands related to data encompass everything from designing flexible access and delivery of data across desktops, mobile devices and wires to enhancing connectivity methods, such as our Secure Financial Transaction Infrastructure®, to provide secure systems with strong reliability and low latency connections to market participants across the globe. Our modern technology systems have been developed and enhanced continuously -- for cyber-hardening, scalability and reliability -- over the last 16 years. Because our solutions are integrated and span the end-to-end trading and clearing processes, our technology is well-suited to meet ever-increasing demands for functionality and capacity.
Q: What future technology development do you think has the potential to change the marketplace as we know it?
It’s not one particular technology but a combination of developments in how data and technology interact: algorithms, machine learning, data analytics, mobile platforms, cloud computing coupled with drop-in storage costs and an increase in available bandwidth are all driving enhanced visibility and risk management solutions in our industry. Technology designed to promote and enhance data analysis, flexible delivery and consumption is going to play a big role in the future of global markets. The acquisition of the Interactive Data business – now part of ICE Data Services - is a good example of our involvement in this trend; we’ve expanded on our flexible connectivity, feeds, desktop and analytics business to offer market participants a great deal of choice in how they receive data, what they receive and how much they wish to receive.
There’s also a lot of buzz –some of it maybe unnecessary – around blockchain. There’s hope that blockchain could streamline and evolve existing multi-party workflows to be more real time and consistent in order to eliminate reconciliation-related costs and redefine the role of intermediaries. We, of course, actively monitor and experiment with these technologies and look for opportunities to integrate them based on the value they add for our customers.
Q: When you’re developing new technology, what’s the most influential factor?
The customer. Everything we do at ICE comes back to the customer, and I think that’s what really sets us apart from others in our space. We view our relationship with our customers as a partnership because what we do is based on fulfilling their needs. It was a tone set in the very early days of ICE, when it wasn’t apparent that the world needed another exchange - what was needed was innovation with a customer-centric approach.
Today, we’re serving global market participants, and there’s no one more qualified than these participants to inform our technology strategies. Whether it’s knowing what devices a mutual fund manager is likely to use and how they want their data delivered – desktop, mobile or tablet and through feeds or files – or understanding the price discovery process of a commodities hedger, having a deep knowledge of your customers is key. We actively solicit feedback on technologies, features, graphical user interfaces (GUIs) and APIs as part of our development process so we can minimize friction and ease integration with customer workflows; and we make sure we fully understand how our customers are using our technologies and how we can best help them. I enjoy spending time with customers regularly because I learn a lot with each meeting.
Our focus on developing tools our customers need is the biggest driver behind our growth. We build technology market participants need, and that’s shown in how they use our tools - for example, ICE IM, the instant messaging platform we developed for derivatives traders, saw a 240% increase in platform users in 2016. Similarly, more than 2,400 investor relations (IR) professionals adopted NYSE Connect, the IR desktop and mobile solution we developed in early 2016 after identifying the need for a cost efficient IR solution based on conversations with our customers. We’re also seeing increased interest in trading on smartphones through our mobile apps. Thanks to the insights we’re able to gather from our customers, we continue to lead in our space when it comes to providing end-to-end, integrated technology spanning global markets.
Q: What’s next for ICE technology?
With ICE’s acquisitions of NYSE, SuperDerivatives and Interactive Data Corporation, we’re working to combine all the technology and proprietary data assets we’ve developed or acquired into a single, high-value offering for market participants. This goes back to my earlier comments around our efforts to develop end-to-end, integrated solutions; right now, we’re focused on integrating a leading data offering into our existing execution, clearing, instant messaging and analytics platforms in a way that simplifies access to data and the ability to act on data in real time. This should support the needs of market participants for operational efficiency as well as bring more market opportunities to light, while driving regulatory compliance.
Beyond that, we’ll continue to expand to meet constantly changing dynamics in the global marketplace. Regulation, technology, and market dynamics are changing at a rapid pace, and we intend to continue leading within this space. We’ve been willing to change and adapt quickly, and our customers’ needs will continue to set the agenda; that’s an integral part of who we are. So, while we currently have full enterprise solutions across trading, clearing and data, we anticipate change being a continuous part of our future.
The pace of change continues to accelerate, not just in our industry but also across all sectors. We’re excited to see what the next few years bring, how the technology needs of companies we work with evolve and how we can meet their evolving needs, such as helping them grow and manage their operations efficiently and securely.
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