Who are you?
Jean-Philippe Malé, I am the CEO of BidFX. In a very odd way I am the co-founder of this organisation, given that BidFX was founded internally within TradingScreen. I can proudly say that our team created BidFX within a larger organisation.
Which firm do you work for?
What we do, we provide a cutting-edge set of Foreign Exchange (FX) execution tools to institutional investors. The company is global, we really started globally on day one: Singapore, London and New-York. We have expanded since then, I cannot believe how quickly we have grown. When you have a great team and arguably a bit of luck!
We started with five or six people and we are now approaching 100, which is scary [laughs].
What does your firm do?
We started in 2013, incubated within TradingScreen and we looked at the state of the market. We saw quite a few new platforms starting out, they were all based upon speed and the thesis that the FX market will turn into a typical exchange-like trading model where most transactions will be done on an anonymous basis with some kind of credit intermediary in the middle that will facilitate transactions post-trade. We took a different approach and it ended up being a good bet for us in terms of our business model. We listened to some of our larger clients and we realised they actually valued relationships. Of course, the quality of the price is very, very important. But they value the relationship more than they value anonymous access to the market and liquidity. So we built BidFX on top of these core principles:
- Pure technology without price modification
- Access to a very broad range of relationship-based liquidity providers which may be anonymous trading venues if you want to have access to them as well
Our clients want to know and control the sources of liquidity that they tap into.
We really built the company from those principles. And to this day we stick to these principles and the promise of any FX instrument, any source of liquidity, any negotiation protocol – all delivered as a technology provider.
What do you do for that firm?
In terms of what I do, that has changed, a lot, over the years. For those who have created a business from scratch, whether you do that within a large organisation or whether you do it on your own, the crux of it is that you start out by doing everything. Everything, whether that’s taking out the garbage, taking to clients or doing some coding yourself. So what I do has changed a lot, now I would say my role is closer to a CEO role!
I manage the strategy, the vision and even more importantly, building and managing a team of very successful individuals. Making sure we are ahead of what is coming to use in terms of market changes. Animating a team who will navigate through this change. One of coaches I used to have in London used to say that there’s only one thing in life which is absolutely for sure and that is that things are going to change. Whether you are ready for it, to embrace it and accept it or if you want to stick to your guns and just hope that it’s not going to happen. You may be correct for a certain period of time but it’s going to change, so my job as a CEO is to make sure we assemble a good team to accept that change and get the best out of it.
What made you join your current firm, why spin out from TradingScreen?
We (re)started FX back in 2013 and that was 5 to 10% of my time. We had other projects in-flight at the time, I was creating a Fixed-Income platform back at that time, well, multiple Fixed-Income platforms actually.
Back in the summer of 2016 we [TradingScreen] had a change of CEO. Pierre [Schroeder], the new CEO had been on the board for a few years and knew the company really well. He looked at what we had done [in the FX group] and declared it was a good example of a successful project which could be spin-off from the rest of the group. The decision was made at a management offsite a few weeks after.
That sounded like a very exciting challenge. I had indeed experience creating and managing global teams and strategy, but I had never had to raise capital. We formally created BidFX in January 2017. We found the name at a pub around Holborn, I won’t give you all the other names. But I couldn’t believe that the company name and URL were not already taken. We jumped on it and bought it and all the associated URLs which we may use in the future.
That’s really the genesis of BidFX.
[Author’s note: I recommend the Lyceum Tavern]
What has your journey looked like from starting your career to here?
I studied Computer Science and Financial Markets back at University and I did a masters degree in Canada. It’s a long story but at the same time it does feel like yesterday…
The crux of it was being curious, wanting to explore things I had never done before. That’s one of the traits of my personality, at some point in time I have to change and do something else. I studied in Paris, France and in Canada and then I went on a trip to New York where I met the team at TradingScreen. I then joined the firm, three weeks later in London.
That’s taught me a lot of things over my career, at the end of the day we are all very similar across cultures and religions. In the markets, at this level we are all very curious individuals, passionate about what we do.
When I joined TradingScreen we were around 35 globally. A very small team, we worked really hard and many of us are still in the EMS industry today, having various senior positions. We ended up creating an industry in the early 2000s.
There were a few interesting companies before that, who remembers GL Trade? They had fantastic technology if they had managed to make the right turn at the right moment they would have become the Bloomberg of this world. But now I think few people remember the name.
It [GL Trade] was an amazing company, if you look at what they had achieved in the early 2000s it was very impressive, most banks and brokers were using them, they had connectivity to all the markets, they had a really good technology stack, considering that the firm was created in 87. It’s easy to say in hindsight but taking the right turn at the right time could have transformed the company. The company hasn’t disappeared, it’s just part of a larger group and the branding has changed, I don’t know how many banks/brokers are still using it.
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?
A significant part of our customer base includes the most sophisticated hedge funds in the world. We have indeed a strong expertise and brand within the buy-side community who uses our technology to improve their access to liquidity. These clients are very analytical in their decision making process and care less about brand which obviously came after a few years. They care about one thing at the end of the day which is their [clients’] P&L.
We have been selected as the FX technology partner by many large funds which is a great testimony to the value of the service we are offering the market. Our technology can support all currencies but adds even more value on less liquid products such as restricted currencies often traded as NDF.
As the number of commercial transactions taking place between currencies in Asia increases and the speculative investors in Asian currencies are also increasing in volume there will be new marketplaces created in Asia for FX. More transparency, especially for restricted currencies, and BidFX will play a big role in these changes.
Blockchain / Distributed ledger technology – in use with your firm? Hype or real?
We don’t use DLT technologies ourselves. In a live trading environment these technologies don’t play a role yet. However maybe we could see something developing in the next few years. So far it’s more focused on post-trade processes.
At some point you said who cares about post-trade reconciliation, it’s all done in real-time with FIX…
But we are not quite at that stage yet, so optimising the post-trade reconciliation aspect is still quite relevant, DLT and Blockchain can play a big role in reducing costs in this space.
We [BidFX] are not using it but if I take a step back, in the larger group of SGX, some departments use this kind of technologies. Recently we announced a new bond issuance using DLT.
Cloud - in use with your firm? Hype or real?
Real! In our space quite a few people are confused by this term. BidFX is a software-as-a-service (SaaS) provider which also operates a global private cloud. We build our own infrastructure and run it in well-known secure datacentres around the world.
We also use public clouds on top of our own infrastructure to perform certain functions. It allows us to deploy proximity datacentres in non-core FX hubs and therefore scale in a cost efficient way.
Where do you see technology impacting in the next five years on:
- Your firm
- Wider market
Everything we do is via technology, in some countries right now we are not even allowed to see each other face-to-face, so technology is interfacing human relationships. I am in Singapore, you’re in another town. Before 2020, I had never used video conferencing for five or six hours per day, every day. We had lost the human touch of what it means to work in an organisation during the lock-down phase. Part of my job is anticipating what will happen in the future, to prepare my team and structure my team to embrace that change. I don’t think in my entire career we have seen a change of the magnitude of what we have seen in 2020 in the way we work. How will the workplace change? How do you keep a company culture? How do you keep people productive?
Fintech – is that how you describe your firm?
Yes. I like the sound of this word, but we have been in this space for such a long time, long before it became a buzzword. We are in a very niche market; the mass market does not know what we do. Fintech has allowed the masses to put a word on a concept that has been there for decades.
Are we a fintech? Absolutely we are a fintech!
Go crazy – make some wild predictions about machine learning, AI, DLT, cloud, whatever
If you push the envelope further from where we are now and the concept of an office disappears and everybody works from home. This is going to be a radical change. for the last hundred years or more people have congregated in cities, for example, in the building I am in right now there are probably 4,000 desks, people work together, improving productivity as a result. But what if we find another way of working? Do you need to travel for work? The people that find a good way of keeping their team productive, will produce a service that will be way cheaper than you can produce by maintaining an office and paying people in cities where wages are much higher than people really need. If 60% of your salary goes in rent what’s the point [of living and working in those cities]?
Prediction: A lot more companies will find ways to make people who have never met productive and therefore be 100% virtual.
The people that will benefit from DLT are the people that run ledgers such as banks and central banks, having some of the biggest ledgers out there. But how do you get these firms to embrace this technology because it will mean flipping the bank upside down, changing everything: processes, security and everything that they know today. How do you implement that change within a bank? Many banks have their name associated with a DLT or blockchain. Although there are differences the terms are used in a similar fashion. What I have seen is that although lots of banks have started these types of projects, they do so in a carved-out way so it does not impact their core business. The old processes may be expensive and slow but they are working.
Prediction: these technologies will be embraced by a new generation of banks, more than an existing bank.