One of the core competitive differentiators in the financial markets will always be to what extend we are able to extract the maximum value out of the trading flow we get, as this allows us to set more competitive prices if needed in certain segments.
Most major global players have their trading desks concentrating on the important trading flows, where real order service is required or where traders have a view on the longer time horizons, while "ignoring" the importance of the small tickets, which either come in as fired by a machinegun or drip in below the "radar".
Today the financial markets are an uneven playing field, due to very high differences in budget to overcome the technology gap to global players.
- The constant spend required to keep up with increased digitalization of the market.
- Upgrading trading systems, market connectivity and client platforms to cutting edge.
- Getting the right competences into the company, to develop smart algorithms for pricing, execution and risk management.
Saxo knows what this means, as we employ hundreds of smart IT developers and spend significant CAPEX on staying in front of the curve. Saxo even offers other banks and professional clients to use our technology, where they benefit from our expertise in execution, risk management, processing and constant development, while retaining complete discretion in their own risk appetite, hedge strategy and own liquidity relationships.
We have done well in the past, and today have a very advanced setup on price and flow. Clearly this has in the past been one of the core competitive advantages for Saxo, but we need to challenge ourselves if we want to stay competitive and even go for market share that we don't have today.
The "Nexus" project described here has been a journey with many versions of our algorithmic suite over time, as we got better and better and as new optimization potentials became evident. It was almost as hard as "putting a man on the moon", but it was exactly for that reason that we did it!