Devexperts: Delivering innovative products with a focus on the future

Headquartered in Munich, Germany, Devexperts was founded in 2002 and currently has over 400 employees in different offices around the world. It specializes in the development of custom software solutions and services for the Capital Markets industry. e-Forex talks with Stanislav Stolyar, VP of FX Products at the firm to understand where they stand in the increasingly competitive landscape of vendors and how they are facing modern challenges in the world’s markets.

First Published: e-Forex Magazine 83 / e-Forex Interview / November 2018

Stanislav, please tell us a little about your career and how you came to join Devexperts? 

I met those who would become my future colleagues at University back in 1998 when software for the financial markets was in its early days. 

I was working on my bachelor’s thesis and Michael Babushkin, the future founder of Devexperts, was my mentor. We began working with others at the university, and this incredible group of people would become the initial core team of Devexperts.

What are your day-to-day responsibilities and how does the FX product team fit into its wider organizational structure? 

I run the operations across a number of departments. My main goal is to ensure that we are as efficient as possible while meeting the needs of our clients and finding the right balance between the always growing demand for new engineering talent and our natural growth velocity. In terms of the FX product team, we have always been software engineers first. Right now, for example, I am looking for ways to restructure our approach to product management in our platform business.

The company’s headquarters in Munich, Germany
The company’s headquarters in Munich, Germany

What key business areas does Devexperts focus on?

We focus on multi-asset trading platforms with brokerage automation technology, complex large-scale software projects, and market data-related products and services. Our two main offerings in these areas are the dxTrade platform and real-time market data through dxFeed. 

The first is aimed at the trader in the form of a software that allows them to invest in capital markets, front-end to back-end, over the counter and via the exchange, and so on. Then, dxFeed is a real-time market data provider and developer of technologies surrounding market data. 

What type and range of clients does the firm provide solutions for and where are they mainly located? 

Money is global. But markets are not the same and since we not only work for FX (OTC) brokers, our team focuses on serving financial companies in markets all over the world including both retail and institutional brokerage houses, exchanges, and buy-side firms. The firms we work with are located in London, all over the EU, Israel, Tokyo, Istanbul, as well as in the U.S. in Chicago, New York and California (LA and Bay Area) and more. 

What range of financial trading instruments has Devexperts developed deep domain expertise in? 

We started to deliver trading platforms back in 2002. The first two asset classes that we had major exposure to were Spot Forex, stocks and listed options. When there was a need to include another asset class, we had numerous consulting sessions with the customer where they shared their expertise with us, and after the delivery we were able to consult them back and even teach them how to leverage our tech and get the best out of their expertise. 

When we decided to create our own platform dxTrade in 2008, the first class we supported was Spot Forex. Since then we have added CFDs, spread bets, cryptos and more OTCs, e.g. flexible FX options, as well as exchange traded asset classes, i.e. stocks, futures and options etc.

The power of dxTrade is in its modularity and adaptability
The power of dxTrade is in its modularity and adaptability

Please summarize the main finance software product lines that Devexperts offers for the all-round automation of brokerage and investment activities?

Our main product lines are solutions for different types of brokerages and exchanges, which utilize various components of dxTrade and provide real-time market data through dxFeed. Solutions are about licensing, integrating and customizing the components of the dxTrade platform. 

As for dxFeed, they’re a separate entity now, and their software is capable of receiving, distributing and storing millions of quotes per second for our clients. We have a massive historical dataset that is stored and processed in order to provide services around that. We benefit from having easy access to both.

 

Let’s move on to your range of platform solutions. What are these and what types of applications do they cover? 

We don’t just work on skins and add-ons, but on how a platform should behave – how to cook the business logic – basically if our clients were buying a car, we’re the ones who take the engine apart, make specific changes to the very core, fine tune it and put it back together; faster, more robust, and unlike any car on the market. 

The Devexperts core offering is a retail trading platform called dxTrade which is absolutely cutting edge. What key attributes have made this product so powerful and attractive to clients and what options do they have for deploying it? 

The power of dxTrade is in its modularity and adaptability. Let’s take our frontends as an example. We can focus on just the mobile application and deploy it into the client’s existing trading infrastructure. All of our GUIs (mobile, web-trader and feature-rich desktop) can work with dxTrade core or with 3rd party backends. Or let’s focus on the backend. Its pricing, risk-management and order routing engines can take incoming order flow via FIX API from various sources. And it comes in handy that dxTrade is by default integrated with dxFeed, our industry-leading real-time and historical market data delivery service. 

 

Our team focuses on serving financial companies in markets all over the world
Our team focuses on serving financial companies in markets all over the world

Many platforms from other providers can be white labelled or customized. However, Devexperts talks about using the concept of “deep white labelling”. How does that work and in what ways have you engineered the architecture of dxTrade to facilitate it? 

Before we started dxTrade, we helped one of our clients build a proprietary trading solution that was quite famous in the industry. For that platform, over the years, we created over 100 white labelled versions in every possible language. So, when we designed dxTrade, we paid specific attention to the platform’s capability, to the multi-language and white label capabilities. What we call deep white labelling is when not only people outside Devexperts, but even Devexpert’s engineers who didn’t work on the project, cannot realize that it may share the same core. 

Let’s not forget that Devexperts is also very well known for its market data products. Please tell us about these and how the data services you currently offer are delivered.

The Porto office
The Porto office

With dxFeed, we work with real-time market data. At its core, this is computer science, it’s interesting stuff to work with. At peak times, say in the morning in the U.S. when Europe and the U.S. are both open, the combined ecosystem of these markets produces up to 10-12 million events per second and it just keeps growing. You have to be able to absorb and store this data and distribute it to thousands of subscribers with as little latency as possible. And you have to be able to provide this technology and service in a cost-efficient way for ourselves and the client. 

In what ways do you see the managed data service model and associated cloud-based solutions becoming increasingly popular for trading firms as they look to capture opportunities from Big Data whilst also dealing with ever increasing volumes of mission critical information? 

Managed services in market data and data management have become increasingly popular especially with the new players, but also with established firms because this move offloads a huge amount of data management activities and license management to trusted vendors, allowing the trading firms to focus on their business. In the Big Data space, the expertise is still scarce and building it in-house is a long and expensive process. A hybrid model utilizing managed data services allows them to build such expertise gradually, keeping key knowledge in-house but going light with the infrastructure and management required to safeguard the volumes of mission critical or decision supporting data.

How is Devexperts looking to expand and further develop the global infrastructure of dxFeed? 

Regulations are always changing. These changes alter how we must analyze market data, so we are constantly looking at regulation and how to make sure dxFeed is prepared for the latest developments. The markets are changing too, with the introduction of new assets such as digital currencies. dxFeed is one of the leaders in terms of the variety of data sources of digital currencies. 

We are connected to 20 plus digital currency exchanges and people can get that market data from us. dxFeed will continue its expansion into the EU region throughout 2019, being already present in key data centers such as FR2 in Frankfurt and LD4 in London. We are also on the move now to launch our infrastructure in Hong Kong and Shanghai, with Singapore and Tokyo following in our APAC expansion initiative.

The e-Forex team also publish FXAlgoNews so many of our readers are quants and trading firms engaged in algorithmic trading. How is Devexperts leveraging next generation technologies to provide these firms with access to high-volume streaming data for powering their trading strategies and model back-testing requirements? 

Our cloud-based tick-level market replay and extraction data platform has been used by quants in different firms to run backtesting, power their platforms in “back-in-time” mode and run analytics on historical data including full order depth data. We have provided full tick level content for the markets we serve since early 2010. In addition to that, we provide real-time option pricing services and analytics, including real-time option greeks and streaming arbitrage free theoretical option prices. We use a number of technologies, such as GPU acceleration and CPU advanced vector extensions on our back end to enhance these calculations to provide quality products to our customers. 

dxTrade Multi-asset trading platform
dxTrade Multi-asset trading platform

Let’s talk about cryptocurrencies. What’s your personal view about the future of this volatile market and how you think it’s likely to develop? 

Bitcoin was initially widely adopted by the black market because one of the major differences between digital and fiat was the lack of government control of the crypto transactions. Nowadays we see more and more regulation getting into the crypto trading industry which is a good sign. The main issues are security of funds, trustworthiness of the counterparties and extreme price swings. Due to high volatility of the digital currencies this market has attracted crowds of “gambling-style” retail investors and brokers, driven by this demand, have had to add the new asset class to their offering. It adds additional credibility and stability in the market when you see the big players like CME and CBOE offering futures on products like this.

We are already at the stage where we can demonstrate real working AR trading applications
We are already at the stage where we can demonstrate real working AR trading applications

How does Devexperts satisfy retail brokers demand for adding cryptocurrency trading features to the dxTrade platform?

Driven by the demand from our retail broker clients we have added crypto-currency CFDs into the platform and integrated with 20+  different crypto-exchanges to provide pricing via dxFeed market data service. Since those products were added, brokers have produced mixed results, due to a high volatility some of them have experienced significant losses at times. It is the nature of such a new market, but we make sure the technology is sound and the option is available.

A Devexperts Chatbot
A Devexperts Chatbot

e-Forex has recently been focusing on various factors that may influence the growth of institutional cryptocurrency trading. What do you think needs to be done to make cryptos a more attractive asset class for institutional investors and do technology providers like Devexperts have a role to play here? 

Institutional investors need trust and transparency in the way their funds are stored, and transactions are processed. Regulation in this case is the right path to make this market more attractive for institutional investors. The security of funds needs to be addressed by trusted custody solutions. Based on the recent news, several large infrastructure players are going to offer this service later on. Devexperts has not been involved in custody solutions yet, however our vertical brokerage platform and high-performance matching-engine are available for those players who are interested in building the next generation crypto-brokers and crypto-exchanges. 

We don’t just work on skins and add-ons, but on how a platform should behave
We don’t just work on skins and add-ons, but on how a platform should behave

As a technology pioneer, it’s no surprise that Devexperts is a FinTech committee co- chairing member of the global industry association for Virtual Reality & Augmented Reality. What impact are new technologies like these together with others like Artificial Intelligence and Machine Learning likely to have on the electronic trading environment over the next few years? 

At Devexperts, we are already at the stage where we can demonstrate real working AR trading applications where you can place orders and see what you used to see on your monitor. It is just not convenient yet. The hardware itself is still a toy. It is on the expensive side but sooner or later the option will be there and by that time we will have been engaged in the development of these products for some time.

Devexperts also provides consulting services for financial institutions. What areas do you focus these on at present and which ones in particular are you seeing increased demand for? 

Financial institutions are often looking for new ways to innovate. This requires us to always be looking at new technologies, experimenting. We have many proof-of-concept technologies like I spoke about before; AR/VR, chatbots, and many established enterprises are looking for these innovations. They turn to us as a technology company and we show them what is possible and what is trending. That is the key to staying ahead of the competition and not getting left in the 20th century.

We have always been software engineers first
We have always been software engineers first

Devexperts recently opened a new R&D center in Bulgaria that will join others you have in Munich, Antalya and Porto. Why did the company choose Sofia and what work will your team be concentrating on there? 

The Porto center is one we’d been planning for a while but as for Sofia, we didn’t plan to open an office there in 2018 It was a lucky coincidence really – it wasn’t planned. Sometimes there are coincidences you just can’t ignore. We met Mr. Andonov and realized soon after that he was a great fit for our firm, the turnaround was very quick, and we were able to set up our operations in Sofia which has historically been a hub in eastern Europe for tech talent and manufacturing throughout the 70s and 80s. Even now, it remains the right place to open up an R&D Center due to the large pool of educated professionals and engineering talent.

What sort of products will Devexperts be working on in the coming months? 

Currently we’re working on an automated trader’s assistant, Devexa. With Devexa, traders can take their Amazon or Google devices and interact with their trading platform just by speaking. 

An accessible admin panel capable of broadcasting messages to all of your traders, or targeting specific users, for example those who have shown a continuous interest in price of Bitcoin could be prompted with new opportunities to invest in other cryptocurrencies. Chatbots open the door for introducing brokers (IBs), giving them the ability to target new users in any social networks that allow chatbots.