First published in
Comment
Trader voice – the last
bastion of the old world
Patrick McCullough is chief executive of Speakerbus
If you’re old enough to remember
IBM being a giant in the computer
networking business, you will
certainly remember how Cisco
disrupted its world. At one time
IBM had approximately 35% of its
total revenue coming from licenses
generated by their networking
products. Cisco came along
and dramatically reduced IBM’s
cash cow by allowing enterprise
customers to rid themselves of
a hardware-centric, proprietary,
single purpose, expensive solution.
At the end of the day, Cisco, along
with other tech companies who
had the technology to remove this
massive proprietary installed base,
changed the world of computer
connectivity in a revolutionary
way. What disrupters like Cisco
and Wellfleet provided was faster,
standards-based, software-oriented
(rather than hardware-oriented)
and higher value (i.e. lower cost)
technology. Technology really did
disrupt the market.
Today, the trader voice
environment is going through
a similar disruption. The largest
vendors in the trader voice market
are now in a similar position to IBM
in the late 1990s. Their solutions are
proprietary, expensive to maintain,
and lacking true open integration,
limiting the banks’ ability to pick
the best-of-breed products for
their user community. The shift
from proprietary to standardsbased, from hardware-oriented to
software-oriented, from expensive
to high-value and from closed
to the best available technology
approach are at the core of the
www.bankingtech.com
disruption in this last bastion of
voice technology – trader voice.
The market disruption is being
driven by large financial institutions.
Technology and business leaders in
the largest global financial services
firms feel constrained with the
systems they have today. In most
cases their strategic direction for
voice cannot be applied to their
trader voice environments. For
example, let’s say a major global
financial services company chooses
Cisco Systems for enterprise-wide
voice, providing the PBX and
phones. If this firm now wants to
build a trading floor using either of
the two market leaders for trader
voice, they would not be able to
use either the Cisco phones or PBX.
The reason? These providers offer
proprietary solutions which do
not integrate with Cisco, or indeed
anyone else, forcing the traders to
use a completely different system
to get the functionality they need.
This is one of the biggest frustrations
for COOs and CIOs in charge of the
trading floors. Not using the highlyreliable voice and collaboration
standards used by the rest of the
firm requires an additional layer of
support, and causes management,
analytics, reporting and compliance
headaches. This disconnect between
the banks’ requirements and the
systems they’re using means
that massive market disruption is
inevitable!
So, what does the future look
like? Trader voice will be on the
device of choice for the traders
and back office staff. The devices
will integrate, in a standards-based
way, to meet the ever-increasing
regulatory and compliance
requirements. The solutions will
allow the flexibility to mix and
match ‘best in class’ recording,
compliance, IM, video, dial tone,
hoot and intercom products. Trader
voice will be offered for a classic
infrastructure, but also in hosted
and cloud environments. Although
the trading floors may still be
isolated on their own network,
the voice components will be
consistent with those of the rest of
the company to reduce operational
overheads caused by having
separate support organisations.
And lastly, we will see most of the
trader voice functionality supplied
by separate devices, merged into
single systems or bundled software
applications. The days of having a
lot of voice-related hardware on a
trader’s desk will be gone.
For the last 20 years trader voice
was the last bastion of voice
technology which had stayed
firmly in the 20th century. This is
now set to change, and trader
voice is finally going to enter the
21st century. As typically happens
with markets in times of change,
we will see the largest incumbents
desperately try to hold on to their
past approaches and existing
revenue streams. More excitingly,
we will see some sleeping giants
and new players disrupt this space
and offer the industry what it needs
and deserves: a solution which
they want, not one which is forced
on them. The winners will be the
banks and those providers which
are agile and responsive to both
market demands and client needs.
February 2016