Third interview with people within Fintech, this one with Matthew Reid of SimCorp
Matthew Reid, Product Manager, Director, SimCorp
Matthew is Product Manager for the Order Manager module of SimCorp Dimension. Matthew has over 15 years’ experience in the financial software industry and has played a key role in the ongoing development of trading solutions and the Order Manager module in line with both industry and client expectations.
Who are you?
Matthew Reid, Product Manager at SimCorp
What firm do you work for? [How long have you been there? What other roles have you done before in that firm?]
SimCorp
What does your firm do?
SimCorp is a leading provider of Investment Management Solutions. The background is that the company was founded as a back-office provider in 1971. SimCorp moved into the product market in the late 1970s and was originally best known in the Scandinavian region. Since then the firm has grown to be a complete front-to-back provider, arguably the first true front-to-back provider in the Investment Management space, all the way from accounting to the front office.
In the past the market had many more ‘best-of-breed’ solutions. The market though has moved in the direction of SimCorp in that over recent years more firm such as
CRD and
Blackrock are moving into the SimCorp front-to-back space although they don’t have the full depth of back-to-front capability.
Now SimCorp is a business with 20 plus offices and more than 1800 employees globally.
SimCorp have 52% of the top 50 asset managers (by AUM) as clients, 42% of the top 100 and 46% of the top 200
SimCorp Dimension has over 16,000 users worldwide and SimCorp retains 300 clients globally.
What do you do for that firm?
Product Manager, based in London, on the Order and Execution part of the front office product. One of a team of Product Managers on Front office that cover four products:
Order Manager - classic Order Management System functionality aimed at the centralised dealing desk
Asset Manager – ‘what-if’ scenario and portfolio modelling for Portfolio Managers
Compliance Manager – aimed at the Compliance Manager and the backbone of all of the compliance that is executed in the system
Alternative Investments Manager – Front Office system for illiquid assets and private markets but tends to be used by different teams, as this offers different functionality
What made you join your current firm?
I was the Managing Director of SolutionForge. SolutionForge had built the first commercial FIX engine running within the Microsoft .NET platform and was pushing into the buy-side front office OMS trading space.
I thought I would be at SimCorp for a year, and I’ve stayed for 15.
What do you see going on in the world right now where people are gaining real commercial advantage from the product/services of your firm?
This has changed significantly over the last few years. We are moving from being a software vendor to being a service provider. In the past we’ve been “all things to all people” and now we are moving to being a backbone of an ecosystem for investment processing. We’re not going to build everything that our clients want. Client want to have their “secret sauce” that adds alpha and use SimCorp to handle the heavy lifting.
We are being pushed to deliver increased levels of automation for processing and we are doing a lot of development in trading automation. A client can get data from SimCorp, extract that data, run their own models – which counterparties to use for an order, how to trade an order and so on. The client is using Dimension as the backbone and then they integrate with their own proprietary technology. An example is a firm that has proprietary intellectual property such as a trade optimisation module that they use with data sourced from Dimension and the results feed back into Dimension.
We are incredibly willing to work with other parties to get optimal outcomes for clients. Other vendors may not offer the openness that is intrinsic to the SimCorp model. This has been received well by clients and prospects and is an ongoing model of cooperation with clients.
Clients also want to see SimCorp partner up with other vendors. A good example of this is the TradingScreen alliance, where we have linked with TS to deliver value from an execution perspective but also a much closer integration. We are also looking to other partners in this space and that’s something we are very open about. Much smaller firms will be able to join with SimCorp, not quite an AppStore model, but something where they can access the SimCorp backbone.
Blockchain / Distributed ledger technology – in use with your firm? Hype or real?
Not seen a big push from current client base. The bigger push we are seeing from our clients in the emerging technology field is machine learning. We are incubating some projects in this space at the moment in response to client requests. We are experimenting at the moment, nothing is ready to go live yet. We have dipped a toe into the blockchain/DLT world but it’s not a core focus of our concern at the moment.
Cloud - in use with your firm? Hype or real?
Until 5 or 6 six years ago SimCorp was software on premise. Since then it has mainly moved to new clients taking a hosted solution. That’s not a “pure cloud” solution, and we are moving forward in collaboration with Microsoft to use Azure for a true cloud-native solution. This will radically enhance our ability to collaborate and work with partners. We will be able to interact with other vendors more easily and with a faster time-to-market for our clients.
Current on-premise implementations are able to take advantage of this as well, as we are able to offload certain data and compute intensive processes to the cloud. So on-premise solutions will be able take advantage of a glide-path to incrementally move to cloud.
Many of our clients are large asset managers who will want to differentiate themselves with their own systems running on the SimCorp core. They will not want to build this into the Dimension product, since that will be available to all SimCorp clients. Instead clients want to be able to interface with SimCorp while retaining their private intellectual property within their own hands.
Where do you see technology impacting in the next five years on:
- You
- Your firm
- Wider market
I would be surprised if firms are willing to take all their technology from one provider. We see some firms in this space who want to offer a “black-box” and deliver everything for the client, typically they are not so keen on integration and interoperability with other technology vendors. As SimCorp we will provide a core platform but not everything that happens within a client firm will happen with the SimCorp core, so we are making our platform easy to interact with others, so if a client has a specific piece of optimisation software
SimCorp will be provided as a set of services, rather than a monolithic application. SimCorp will have to deliver much more than just technology, the corporate ethos is shifting to a deliverer of services. The level of expectations is increasing all the time, clients consider “what are you doing for me?”. Clients expect a lot more, they don’t just want you to deliver software and then say “you solve all your problems with what we have built for you”. They want see what problems you can solve for them and that requires hosting and a spirit of collaboration. Rather than offering a series of integrations for, for example, static data, they want to switch on Dimension and static data is all there and ready to go. Clients want us to take away these problems for them.
At some point there will have to be a reckoning around the charging models as brokers are more squeezed – for trading venue platforms and EMS platforms. Specifically, from a regulatory perspective – a long term consideration has been “can these pricing models survive MiFID? Can these pricing models survive MiFID2?”
Fintech – is that how you describe your firm?
SimCorp regards itself as the leading provider of software solutions and Services to the world’s largest buy-side institutions.
Go crazy – make some wild predictions about machine learning, AI, DLT, cloud, whatever
Machine learning has been of more interest and this is something where we have active projects at the moment in proof-of-concept stage. More experiments than ready for prime-time production.
Important Notice: Copyright Alignment Systems 2020
The second paragraph (biography) was supplied by SimCorp as was the picture of Matthew Reid. This interview was conducted remotely over a Zoom call and transcribed by Alignment Systems. No payment was asked for or received either way.
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