REDI Looks Outside of the Financial World for Financial World Support

Since being spun out from Goldman Sachs in 2013, REDI Global Technologies has looked to stamp its own unique mark on the industry. Part of that move, REDI's chief technology officer Josh Schubkegel says, will be influenced by hiring from outside of the financial services industry.

Schubkegel joined Goldman's REDI team as CTO six months prior to the carve out and he has a background that includes stints at Bridgewater Associates and UBS Investment Bank. He understands the importance of building a technology team with a strong background in capital markets technology. But part of the value-add for REDI, he believes, is in its outside-the-industry thinking.

"For me, a big part of REDI's value proposition is that we are basically a technology company, which means we want to do things differently than other financial industry firms. So a big goal of ours is to bring in an influx of outside-the-industry talent," Schubkegel says. "We have people from Amazon, Google, MongoDB, RedHat, TravelClick, PlaceIQ and others. I think that there's a lot of innovation happening outside of the financial industry and we want to bring some of that here. We're actively working to build REDI into a more open platform, and many of these folks are working on that and bringing their unique perspectives to the project."

Orientation
Schubkegel says that the best aspect of hiring so many technologists and developers from outside financial services is that they bring a more product-oriented and quantitative focus to REDI's development roadmap.

As an example, he says they are more inclined to use A/B testing—controlled or multivariate experimentation—with new features and functionality, or layering analytics and business intelligence on top of the platform. They've also been integral in expanding the company's cloud-based capabilities.

"If you look at what Facebook did when it bought Instagram a few years ago, they seamlessly moved petabytes of data on a live application and their end users didn't notice," he continues. "It was all done using configuration automation tools like Chef, which we're also making heavy use of at REDI. All of us in the financial industry rely far too heavily on humans doing things in a certain sequence or legacy systems that have been patched together, but to be able to effectively handle the complexities of today's world we have to be able to remove those types of steps from critical processes."

Proof of Concept
In June of this year, REDI completed its year-long acquisition of Bank of America Merrill Lynch's multi-asset class EMS, InstaQuote. It was REDI's first acquisition as an independent company and could prove a sign of things to come. The move increased REDI's client base by more than 20 percent and added 30 employees, who are based outside of Dallas.

For the integration, REDI took portions of InstaQuote's IP, part of its middle and back office, as well as IQ's reporting functionality, Schubkegel says. The integration also led them to create new windows, workflows and integration with additional connections to prime brokers and clearing firms.

"The InstaQuote integration serves as a good case study for a lot of what we're advocating for in terms of this open platform," he says. "We offer our clients and partners an SDK [software development kit] and set of APIs, and the entire IQ integration was done using them. And it was a true, seamless integration. Today, there isn't REDIPlus and then IQ—it's just REDIPlus."

Continuous Delivery
As the industry continues to move in a multi-broker direction for its EMSs, just as BAML decided to sell InstaQuote ─ and, for that matter, Goldman spun out REDIPlus ─ REDI sees itself as a potential buyer or partner for other banks looking to get out of the single-dealer EMS space.

REDI's open-design platform is key to these purchases and partnerships. Of the latter, REDI embedded Abel/Noser's pre- and post-trade transaction cost analysis (TCA) application into REDIPlus; it added Credit Suisse's Advanced Execution Services (AES) to the EMS; and it entered into a strategic partnership with Citadel Technology whereby Citadel's order management system (OMS) will be integrated into REDIPlus to create an OEMS.

"I keep pointing outside of the industry, but if you look at what some companies are able to do in terms of building a product from scratch, they are getting real products stood up in a matter of weeks using the latest technology frameworks and languages and for a fraction of what it used to cost," Schubkegel says. "There's some really cool stuff out there in terms of infrastructure-as-a-service that they're leveraging, too, so they don't have to worry about servers, data center space, connectivity and so on. The buy side is very much looking at their trading total cost of ownership (TCO) today, but we should be doing the same thing by determining where our core competencies are and where we'd be better off partnering.

"My goal at the end of the day, and what I'll consider success, is to shorten, to the greatest extent possible, the time from idea generation ─ and the best ones often come from the client ─ to when we're able to roll that product idea out into production," he concludes. "We're aligning the technology organization and processes to that notion of continuous delivery."

The Bottom Line

● REDI has hired technologists from firms like Amazon, Google, MongoDB, RedHat, TravelClick and PlaceIQ to diversify its development team.

● REDI has fully integrated BAML's InstaQuote EMS into its own REDIPlus EMS. Future acquisitions are possible, Schubkegel says.

● REDI has also partnered with firms like Abel Noser, Credit Suisse and Citadel Technology to add new functionalities and capabilities to its suite of solutions.