Margin Reform and CloudMargin: Key Focus Areas for 2023

Earlier this month, Chetan Joshi, Founder and COO at Margin Reform interviewed CloudMargin’s Nicky Lawrence.

Chetan wanted a tech expert’s perspective on the survey results showing the key focus areas in 2023 for the Margin and Collateral Industry that Margin Reform conducted earlier this year.

In this 12-minute video, Chetan and Nicky discuss what’s ahead.




[0:06] Chetan

Hello and welcome to our first session. Looking through our survey results around “What are the key focus areas in 2023 for the Margin and Collateral industry.”

I’m glad to have Nicky Lawrence from CloudMargin with me today to go through the results and I’ll pass over to him to give a quick intro from your side. Nicky, over to you.


[0:29] Nicky

Thanks, Chetan. Yeah, great to be here. Thank you very much for having me. I certainly saw that poll with great interest as I think a lot of people at CloudMargin did and it was really interesting results. I’m looking forward to discussing those with you.

To give a little intro background on myself. My name is Nicky Lawrence. I’m a director of technology at CloudMargin. I sit in our technology leadership team along with our CTO, Clinton and another Director of Technology, James. We look after our engineering capability here at CloudMargin.

For some background on CloudMargin and what we do. We’re a full-scale collateral management software as a service platform.

We were founded in the sort of aftermath really of the financial crisis, and our founders had a vision to leverage modern, nimble technologies to provide a really robust collateral management platform that was very importantly accessible for all market participants.

We are as the name suggests – a cloud-native platform, and that means we can deliver our service without the huge setup and infrastructure costs.

So the idea really was to take the safeguards and assurances that really mature collateral management platform brings for large institutions and bring that for everyone in the Industry to reduce risk overall.


[2:15] Chetan

No, thank you. I’ve been seeing how your company has been growing over the years and the problem statement that you set out to solve was really important for the industry, especially when the buy-side got injected into the myriads of regulations that impact the collateral and historically they’ve been or some of them still are on spreadsheet.

So it’s, it’s great to see how CloudMargin helped to remove the need for the spreadsheets but also adapt and connect to the different ecosystem which they wouldn’t have had a chance to. So thank you for that Nicky.

What I’ll do now is just I’ll bring up the results and we can just sort of just go through each of those sections of the results and then get your views on what you’re seeing from your internal perspective and also from your clients, which is really, really important today. So let me bring up the first visual.


[3:10] So this is the kind of the overall vision which we presented so this was a survey we ran on LinkedIn at the beginning of January and as you can see there are a number of segments that we will put out to so that the audience here today could see who responded, what were the scores.

So we had a number of respondents and you can see that BAU and IT process automation was the winner from that perspective.

I think that resonates with a lot of people. We had them split up into different industry types. So here we want to show that it’s not just banks or the CCPs. As you know we’ve got asset managers, we’ve got a mixture of viewpoints.

So it’s good feedback from the industry around what people are focusing on this year.

The last 10 years have been regulation, regulation, regulation, so it’s nice to take a breather and it’s now looking at removing some of those tactical solutions

Nicky from your perspective, when we look at the IT side, does this resonate with you and what you’re hearing from your clients and what you’re thinking about as part of your strategy for the next year or two years time?


[4:21] Nicky

Yeah, it certainly does. I really like your point there about as we’re kind of emerging from these regulatory pressures that everyone’s been responding to you; what are people’s priorities looking like after we’ve addressed a lot of that and this definitely tracks with us

What we hear from clients is that process automation is a really big driver and obviously for a platform like CloudMargin that’s always going to be a big driver of adoption and something that is a huge value-add for our clients.


[5:08] Chetan

Yeah. Your product is covering multiple assets. Could you just give us a bit of background with the other products that you’re looking after and what plans you have in the future for what you’re developing over at CloudMargin?


[5:22] Nicky

Yeah, sure. So more process automation for sure.

The way that we see CloudMargin is like a complete post-trade solution really. We make sure our platform is highly interoperable and composable with other platforms. So data in, data out is a really big part of what we do. We have very robust APIs that’s always been A kind of huge part of our vision for the platform.

We really see the value there in clients being able to leverage multiple systems to compose the ideal workflow for themselves and to integrate with their existing systems often. We also have leading integrations with third parties like Cassini, Acadia and SWIFT. We were the first – and I think still only – collateral management platform to have a SWIFT BIC.

What we see a lot of demand for is people really want to simplify their workflow processes, right through everything post-trade. It’s what we look at and markets need support with.

And obviously, we’re in a time of very high volatility once again lots of there’s lots of risk out there in the market and in that context, clients want a really reliable, really complete solution so that don’t have to worry about what’s happening there.

And that’s something that we found, I mean kind of touched at the start saying that we’re a cloud-native platform and one of the main benefits of that architecture is that it’s automatically scalable. And we built it with huge scale in mind.

What we found during these periods of very high volatility is that you know, our number of margin calls has gone up tremendously, platforms stayed incredibly stable.

What we can offer as a SaaS platform is that our big clients and our small clients, they get exactly the same level of service throughout.


[8:10] Chetan

Yeah, and I are you growing, are you growing the team as well? You touched on a number of parts of this diagram you talk about pre-trading and cost analytics which lots of firms are now looking at that as volume starts to increase. Are you looking to ramp up your developers, your product team to kind of go into those different areas well?


[8:30] Nicky

There’s also, like I say, interoperability and composability are big parts of what we think about continually from an architectural point of view and that means that we can partner with other providers you know, who can provide those services as and when.


[8:48] Chetan

Yeah, I think it’s an important feedback point you mentioned there because I sometimes see firms trying to do too much and what you’re saying is that you’re teaming up with the best-in-breed technology in those in those different areas which naturally might not be your sweet spot but there are other firms that are focusing purely in those areas so that makes sense to me.

With regards to your advice to similar counterparts in organisations and to your clients, what would your advice be to technology managers working in the margin collateral with space for the next couple of years, what do you think they should be listening to, reading, and focusing on? What’s your perspective?


[9:38] Nicky

Yeah, great question. So quality of data is a really big one. It’s something that we need to really address as an industry, I think. There will be a lot of advances there over the next few years and that’s going to have a big impact, a big positive impact on everyone’s ability to do business safely and securely and reliably.

We don’t know how much volatility there is going to be in the market at any given point and I think what we have seen recently and historically as well right is that you can’t make any assumptions on this stuff.

People in some of the positions to me, you’ve got to be thinking about what happens when things really go crazy in the market, and is your system stable and reliable and will it perform really well.

In a similar way, we like to challenge our assumptions a lot. There’s a lot going on in collateral management right now, lots of changes happening and I think historically there’s been quite a lot of assumptions baked into technology solutions. The one thing that we know now is that this is a massively changing environment over the next few years. So you really want to be thinking about building systems that are as composable and lightweight as possible, minimal assumptions baked in, as agile as possible. And also completely honestly as cost-performance as possible as well.


[11:31] Chetan

Perfect. Thank you so much. I know you’re a busy man. I appreciate your time. I’ve really enjoyed talking to you about, the survey. I’m looking forward to seeing how CloudMargin grows and expands. Thank you so much for your time today.


[11:47] Nicky

Great. Thanks for your time. I really enjoyed it.


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