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Simon Wilson-Taylor: Focus on the Road Ahead


If there is one theme that has run through the career of Simon Wilson-Taylor, managing director of Global Link worldwide, it has been the drive to set up new businesses, sometimes independently and sometimes within the umbrella of larger organisations.

It was this drive that brought him to State Street nearly a decade ago to create a currency overlay business. In turn it led to him being part of the team that made Global Link.

When he joined, he was based in London, but for the last three years he has been at the company’s Boston head offices, where he feels he can view the world from a different vantage point.

“Boston is a great place to view the world from,” he says. “There are not the same issues that you get when you are based in New York or London looking at how to access the market place, you get to look at it from a slightly broader perspective. In particular, it is predominantly a buy-side town, so we see the world from a client perpective. It’s a good place to work out how we continue to build Global Link.”

Strategy

Global Link was always envisioned as a cross product system, it simply started with FX. This is an important nuance in Wilson-Taylor’s eyes, because it underlines the focus with which they approached the platform’s development.

“We wanted to help global investment managers to be able to do their job better from their desk top. Investment managers tend to be the people for whom an FX trade is normally a by-product of another investment decision. The problem we had was, ‘How do we create this universal access to markets in equities or fixed income – both of which require significant regulatory overhead to operate on a global scale – until you have some other reason to be in the market?’”

The logical place to start was with FX because it is less tightly regulated than equities or fixed income, although Wilson-Taylor is keen to stress that this does not mean it is regulated badly, simply differently. “Equities regulation is generally centred on protecting the man on the street, who is not usually an FX day trader. FX is regulated fairly consistently around the world, and if you are regulated by your central bank, it is relatively simple to extend your services around the world. As a result, it was very easy for us to launch FX Connect on a global basis, and create a global footprint for the product.

“With that global footprint, we were able to talk to our clients in 23 countries and find out how we could serve them in different ways, for example with trade order management or research, but we were always working towards supporting the fixed income and equity trades,” he says.

He believes that the success of Global Link is not simply a result of providing solid transaction products, there is a philosophy of trying to look at the world from a customer’s desktop, and the technology and connectivity tools are in many ways a byproduct of this desire to make life easier for the customer.

Coupled with this philosophy, Global Link also benefits from its standing in the market. “It is an interesting position that we occupy, and something that is unique to State Street,” he says. “We are uniquely neutral, and both the buy and the sell sides are happy with that. Frankly, FX is probably one of the business areas where we are less neutral, because we have a significant FX business, but that also helped, because it helped us to prime the pump and get FX Connect’s customers to operate more efficiently.”

Competition

Having got Global Link off the ground in 1996, Wilson-Taylor says the idea of making the system available to multiple counterparties was not one they could instantly take to market. “If we had gone out in 1996 and said, ‘We have a great idea, sign here and come and join us’, other banks would have laughed at us,” he says. “Even when we did three years later,” he says, “With around 175 customers on the platform, other banks were still reluctant.

“Part of their response was the creation of FXall and Atriax, because the banks could see that other people were moving into a space they wanted to be in, especially because it was happening at the height of the dot.com boom and high valuations were being given to any e-business,” he continues.

Wilson-Taylor points out that FX is not an illiquid product, and as a result, the decision to trade rests with other considerations, primarily relationships. Many clients that had previously been trading with Atriax owner banks were progressively doing less business with them, because it was harder to trade with them than it was to trade with the other 32 banks that were available on Global Link.

“One of the reasons behind the Atriax problems was that the banks involved were finding it progressively harder to explain to their customers why they were behaving differently online than offline, where they could deal in multiple ways,” he says.

The ramifications of Atriax’s demise on Global Link have been limited, he says. The volume traded on the platform has grown dramatically since its inception, so the addition of the extra banks has not significantly altered the growth curve. “The impact on us has been more in the media than anywhere else,” he says. “It does mean that customers can now trade with two extra banks over FX Connect, so there has been an uptake in volume, but it hasn’t been phenomenal because Atriax volumes were modest.”

Wilson-Taylor believes that State Street’s generally neutral approach enabled the bank to continue serenely on its course during the dot.com turmoil. “You do get ebbs and flows in any organisation. During the new economy euphoria, we did move more towards the dot.com independent type of business, but not in such an extreme fashion as we saw in some of the other Wall Street or City-based institutions.

“There was this vision that there should be a separate business created to e-enable an enterprise, and in a sense we did the same thing, but it always remained part of the business itself, rather than being a separate e-enterprise,” he says. “We were always intimately involved with how State Street was serving its customers and were then able to extend that approach to help other banks serve their customers through the same window in a neutral way.”

Getting Away From it All

Wilson-Taylor’s first banking role was in 1975 with Canadian Imperial Bank of Commerce, but was followed by a hiatus from direct involvement in the financial markets. During his time away, he was involved in what he describes as a variety of ventures, including spells as sales manager at Fenchurch Insurance and as a regional director of the Export Finance Company, set-up in the mid-eighties to be the central export finance business for UK exporters, as well as creating two private enterprises. “Having set up businesses before, I brought to State Street a real solid base of experience to how you could create a business and how you insert yourself into the middle of the marketplace,” he says.

When he returned to the banking sector, it was as head of currency risk management at Midland Montagu, and from where he moved to State Street. “My background has been very heavily involved in creating new businesses, even though I’ve often worked in large enterprises,” he says. “For example, at Midland Montagu, I created a currency overlay business, and joined State Street to do exactly the same thing, and twice before I set up my own companies in both Canada and the UK. I have an entrepreneurial streak, but I’ve quite often kept it within the confines of larger enterprises because they cannot only provide you with a safer path to venture capital than being out on your own trying to chase funding, but there are enormous internal synergies to be developed if you do it right.”

Married for the second time, and with two children in the UK, Wilson-Taylor’s spare time is split, as he puts it, between the sublime and the ridiculous. “I enjoy hiking, and my wife and I indulge in that quite a lot, but for really getting away from it all and making sure I get some peace and quiet after work, I drive single seat, open wheel Formula racing cars.”

He races in the Formula Dodge Series, a 16 race championship in the US. Because of the nature of the competition, he is under few illusions about champagne showers on the winner’s podium. “There are two types of people who run in this series. There are the 17-18 year olds who are in this as a feeder series as they try and move up to the Cart Racing series, and then there are the people like me who run in the same group for fun. I’m sensible enough to run mid-pack and just enjoy doing it.

“The reason I do it, apart from the adrenaline rush, is that it is the only place I have ever been where I can do the closest thing to what I suppose meditation is about,” he says. “You have to be totally focused on what you are doing, you can’t afford to be thinking about anything else at all.

“During the dot.com boom everyone was trying to rush as fast as they could, and we thought that with the downturn, that world would slow down a little and I was looking forward to that,” he continues. “My world has not slowed down. Global Link has remained incredibly active, incredibly busy and incredibly successful, so I need to find a way of getting away from it all and driving is a very effective release.”

Profit & Loss

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