2018 was undoubtedly a transitional year for Refinitiv. In the first half of the year, the firm was finishing off big initiatives that were started in 2017 – although everything was all ready internally for the MiFID II deadline on January 3 there were subsequent client enhancement requests to work through, while Matching was re-platformed and moved into the Equinix LD4 data centre in London. Meanwhile, in the second half of the year, the focus shifted onto new initiatives: announcing plans to launch an analytics suite and making more algos available to clients on FXall.
Of course, the obvious transition for the firm was being rebranded as Refinitiv from Thomson Reuters’ Financial & Risk (F&R) after a consortium led by private equity firm Blackstone agreed a deal to acquire 55% of the business. Despite the change in ownership though, Neill Penney, co-head of trading at Refinitiv, insists that the focus within the FX business will not change.
“I’ve always said that the focus for us is: cost and risk, cost and risk and that continues to be the case,” he says. “Even when clients are looking for innovations from us, they’re usually assessing that within some cost and risk framework.”
So what innovations should clients expect from Refinitiv in 2019? Well for starters, the firm plans to add functional enhancements to the way that FXall clients can use algos on the platform. For example, they will be handed the ability to pause an algo mid-flight and then alter it – maybe changing the trajectory or finishing out the trade with an RFQ – all without breaking from the FXall workflow.
“A lot of our focus has been on algos and we’re continuing to build out the functionality there as customers increasingly want the ability to slice up large orders on an ad hoc basis within the FXall workflow that they’re used to,” says Penney.
Refinitiv has also cleared out a lot of space on the roadmap to further develop the Transaction Performance Analytics (TPA) tool it announced in September 2018 and subsequently launched in January 2019. The impetus for this, explains Penney, is that FXall clients were increasingly demanding a more fluid way of exploring the data contained within the analytics provided by the platform to drive insights that can actually have a tangible impact on their businesses.
“We used to send out a monthly spreadsheet with the information and data on it, but the feedback that we had from customers was that they wanted insight rather than numbers. They wanted to be able to drill down into the data to answer specific questions that could then inform their trading. This sounds like an obvious thing to ask for, but it’s quite a hard thing to implement well. So we spent a lot of time building a tableau-based user interface on top of our analytics and going from a monthly batch process to one whereby the same day that a trade is done the results will start appearing in our analytics products and then clients can slice and dice the data however they want. So we’ll be talking a lot more about [TPA] this year as we build more advanced analytics,” he says.
Refinitiv’s Matching platform also looks set for a speed update in 2019. In 2016 the firm rolled out a latency floor and launched its binary data feed for Matching, and seemingly it feels that the time is now right to make further changes here.
“No one wants to have to deal with changes every six months, but the industry gets faster and faster and so I think we’re ready for another boost of speed on Matching,” says Penney.
A final key area of focus for Refinitiv in 2019 will be its emerging markets business, where there is clearly potent
ial for more trading activity to move onto electronic venues. Penney says that G10 countries offer emerging markets a playbook for how to develop their FX markets, and claims that in many of these jurisdictions the regulatory reform that is often considered as a burden in developed markets is actually viewed in a much more positive light.
“A typical emerging market country is looking to get more trading electronic, they’re looking to generate reporting to the central banks so that it understands the positions in the market, they’re looking to create benchmarks so that people know where the market is and they’re looking to put codes of conduct in place,” he explains.
Penney adds that, given the global footprint of Refinitiv, it is well placed in 2019 to engage with central banks in emerging markets to help them achieve all these things and modernise their national trading infrastructure.