Andrew, when we last covered oneZero’s business a few years ago, the company had established its leadership in the retail space by building a scalable technology solution to meet evolving regulatory needs. At that time, you talked about the forthcoming “Connectivity Revolution” in retail FX and the central role oneZero was playing in initiating this. How has this developed since 2016?
We have been committed since our founding to use technology to solve client and market challenges. As a result, we were able to create market-leading technology, enabling us to navigate the regulatory revolution in the markets we serve. Over this time, we have seen an increasing convergence of retail and institutional trading, given the related needs for flexible, highly scalable technology architecture. While retail trading is based on high ticket volumes, and institutional trading requires more sophisticated functionality, they both require stability, scalability, and transparency. We have expanded our focus across the entire FX vertical by building out our capabilities for all institutions on our solid technology foundation.
oneZero recently celebrated its tenth anniversary, what does it take to become a leading technology provider in this fast-evolving and highly competitive industry?
The company has been generous in sharing our success with other communities by supporting a variety of charitable causes. Our corporate values are very much about integrity, client service and quality technology. This allows us to attract the best talent and do great work. We decided to contribute $10,000 a month over ten months to worthy causes as a way to acknowledge our growth over the past decade. We care about our people, the quality of our work and our service to clients, so we appreciated the opportunity to give back to our community as a thank you for being partners in our growth.
oneZero recently announced a minority investment by Lovell Minnick Partners and Phil Weisberg. Can you tell us more about the rationale and how this will support your growth?
Last year, we brought in Phil Weisberg as an advisor, and this month he joined our executive team. His extensive knowledge of institutional FX markets provides expertise in an area that is a natural fit for our business given our high-performance technology stack and ability to process large transactional volumes at scale.
The company is continuing to develop its focus on data-driven, real-time software development, and we are excited to offer more to our retail brokerage clients to help them expand their multi-asset trading capabilities. Translating our functionality to the institutional markets evolved organically as our EcoSystem has developed, and many of our larger liquidity provider partners are using our technology to access unique flow.
While our internal organic growth has taken us far, we decided that now was the right time to bring in partners with deep experience and to tap their institutional capital markets expertise to accelerate oneZero’s growth to the next level. Lovell Minnick has experience with companies at our stage of growth, and Phil Weisberg is an institutional FX market expert. Both will help us prioritize the processes needed to scale. We believe that having their input will enable us to expand across the entire FX vertical.
Why was Lovell Minnick interested in oneZero?
The FX market is an attractive space that continues to grow as a non-correlated asset class to equities, fixed income, and alternatives. With increased globalization and the ongoing interest and evolution of crypto-currencies, this is an area that will see continued attention from investors.
Please tell us about the senior executive team and the critical roles they each play within the firm?
Our executive team has worked together for years which furnishes a great deal of trust and communication in corporate leadership. Most of our executive team have in-depth industry knowledge. Jesse Johnson, my co-founder and CTO, is a technology visionary who leads all aspects of technology development.
Matt Kathman, our President & Chief Strategy Officer, oversees all the internal functions of the business. Chris Kline, EVP of Technology and Geoff Graves, EVP of Product Development, manage software development and product development, respectively. And Michael Leydon, EVP of Global Operations and Michael Uttley, EVP of Process and Communications run internal operations and external communications.
How is the company investing in innovation? In what ways has continued investment in your technology allowed the company to address the needs of a broader range of clients (retail brokers, institutional brokers, other market participants)? What products and services are you providing for them?
Our innovation is driven by our product development and responding to client needs. Liquidity Hub is a technology platform with a full suite of operations and execution tools for institutions and brokers to build customized multi-asset class liquidity pools. EcoSystem is a multi-asset liquidity distribution network connecting B2B brokers, prime of prime brokers, banks and non-banks with retail brokers, asset managers and hedge funds. Data Source gives brokers business intelligence tools to better understand key business drivers across customer flow, liquidity provider relationships and the market. We will continue to invest in these three products so they can drive value for all of our clients, from retail brokers to financial institutions, in growing their trading business.
Liquidity Hub is your award-winning technology front-end. What essential trading operation and execution tools does it provide, and what connectivity options are available to manage it?
Liquidity Hub delivers powerful liquidity management, data management, risk management and market compliance. We also offer platform management to brokers that want to outsource the maintenance of their tech stack and support.
You recently announced the release of Liquidity Hub 8.0, What new features have you incorporated into the system and in what ways will it help your clients to better manage their business?
We have reimagined the possibilities of an enterprise trading solution by emphasizing a sleek, modern and intuitive professionally-designed user interface as part of our ongoing effort to support our clients’ growth. The enhanced user interface incorporates Dashboards and Tiles with customized business views and user personalization, which give clients additional tools and flexibility to simplify their daily workflow.
oneZero has built a global network of retail brokers, asset managers, and hedge funds. What benefits are these firms getting from being part of your EcoSystem?
One benefit brokers get from being in our EcoSystem is access to liquidity distribution to a wide range of clients beyond their current network. Takers access multi-asset liquidity from leading financial institutions and receive transaction fee discounts for trades executed within the EcoSystem. In addition, our Direct Market Access technology and expertise help brokers expand into new markets like equities, crypto, commodities, fixed income and more.
You recently introduced a new Client Portal for your online technical support platform. How is it helping you to deliver a better service to your customers?
Our Client Portal is an innovative platform that gives them yet another tool to more effectively manage their businesses. Our goal was to intuitively guide clients through our system so they can spend more time focused on their priorities and growing their business. Shifting to online chat and self-service empowers users to access the documentation they need and address questions faster.
oneZero broke new ground when it introduced institutional-level bridging technology to the MetaTrader 4 market in 2009. What are your expectations for the future success of the MT5 platform?
The success of MT5 depends on brokerages adopting it by offering it alongside or in replacement of MT4. We are experts in MT5 administration and support, and our client support team is responsible for supporting existing Liquidity Hub clients during their transition to this platform. We recently delivered a new tool, Market Data Sentinel, which automates the reporting, monitoring, accounting and compliance of exchange market data used on the MT5 platform. In addition, we’ve developed the technology and market expertise to help brokers seeking to offer their traders a multi-asset trading platform through MT5.
In a multi-asset class model, any trading solution must be designed to properly take into account the unique needs of different asset classes beyond FX. For example, Bitcoin and other cryptocurrencies tend to trade at much different volume increments than traditional assets.
Futures and equities markets require complex attribution structures to manage the dissemination and consumption of licensed exchange market data. While many of these nuances should be transparent to the end-user, we have made the investments required to handle multi-asset seamlessly in MT5.
You have said in the past that the democratization of large-scale data analytics will fundamentally change the dynamic between brokers, liquidity providers and traders. Why is that and in what ways can brokers leverage data?
Data processing capabilities, previously only available to larger bank and non-bank institutions, are now becoming accessible to smaller brokers as costs have come down, due in large part to cloud-enabled services provided by Amazon, Microsoft and Google. This increased access to data and subsequent insights will bring a new level of transparency to the industry. All brokers can, and must, position themselves for success in the future of the OTC brokerage market by strategically partnering with technology providers, like oneZero, who can surface these capabilities to them. Brokers benefit from this by improving trading operations, client and LP relationships, risk management and regulatory compliance.
What work has oneZero been doing to bring the power of Big Data to your clients and help them to take advantage of cutting-edge technology?
Data Source delivers access to next-generation, cloud-based business intelligence tools. This previously unavailable toolkit of resources enables institutions to gain more understanding of key business drivers across their customer flow, liquidity provider relationships and the market. Multiple offerings support the clients’ needs, whether they want to analyze the raw data themselves, use standardized formats or gain access to advanced analytics and industry benchmarking. In addition to oneZero’s data, clients can benefit from further customization by other third-party vendors.
Brokers can now optimize price making, trade execution, and risk management like never before. As retail brokers have effectively scaled their workflows to handle high ticket volumes, the next challenge in competing with institutions is to develop sophisticated, enterprise-grade data analytics to enhance client relationships and manage liquidity provider interactions more effectively. Brokers that understand the unique characteristics of their clients can more effectively manage their hedging and how their flow interacts with the broader market.
We are empowering brokers with better time-series data analytics tools to improve transparency with their LPs. Reports deliver insight on response time and internal transaction flows, so brokers have a reference source to discuss these metrics with their providers. More accurate information can inform liquidity and routing decisions and facilitate discussions around the balance between price-quality (spread) and the impact of flow (toxicity).
Increased regulatory and compliance reporting of FX trading, from ESMA initiatives such as MiFID II, to RTS 27 reporting, requires responsiveness and transparency. Brokers that have invested in their technology infrastructure to accommodate advanced data will be better prepared to anticipate and respond to compliance requirements, for instance, around benchmark data. Brokers will be expected to provide execution quality and market state information which will only be possible through next-generation data platforms.
What impact do you expect to see new technologies like AI and Machine Learning having on the retail FX market and how closely are you evaluating their future potential?
AI and Machine Learning give brokers more power to make decisions and manage risk, but the results will depend on their ability to harness the data. Data Source unlocks this potential by providing an easy way for brokers to collect the data for in-house or outsourced analysis. We can help brokers better manage their business by unlocking big data and machine learning insights through value-added services that enable brokers to derive more significant insights about their OTC market data without the need for in-house data scientists.
You have talked about the value for brokers to offer multi-asset trading platforms. Why is that, and how does this represent an evolution in the market? How can they go about solving the various technical problems associated with doing it?
Today’s market is evolving to the point where everyone expects their technology to offer the ease of use of an iPhone, with access to multiple apps and functionality in one place. Brokerage customers are no different. They will look to accomplish their investment and trading goals through a single solution. If they can’t get everything they want through your institution, they may look for another provider who can meet their needs more efficiently. We want to ensure that every firm can meet the needs of its customers and evolve with the market.
oneZero enables existing clients to simply turn on new asset classes within its existing Liquidity Hub platform. Brokers can manage their trading book, customize liquidity pools and optimize risk exposures through a single enterprise-grade platform designed for high reliability and ultra-low latency. Through oneZero’s EcoSystem, brokers can choose from a wide range of liquidity providers offering everything from cryptocurrencies to direct exchanges such as Cboe across foreign exchange, equities, commodities, futures and more.
Let’s talk about cryptocurrencies. How is oneZero catering for increasing demand to access this emerging asset class and what innovation do you think you might bring to this market?
While we have seen much interest in cryptocurrencies, we consider it like any other asset class. So really the same challenges that we’ve been working through with brokers to deliver equities or futures offerings are similar to what we see in the crypto space. As the crypto market is still maturing, there have been some challenges around fragmentation, security of funds, and availability of liquidity. We anticipate further integration over time as we build our experience and it gets incorporated into a broader strategy that looks at FX, equities, futures, and other products.