Our CEO Anton Pasechnikov visited TRDATA’s Moscow office a couple weeks ago. I had the chance to ask him a few questions during a short interview. We discussed the banking situation in Russia and the world, as well as how TRDATA is adapting its business strategy to meet the demands of today’s financial market. Read on below.
Russian banks have been hit with a wide variety of setbacks– sanctions, the devaluation of the ruble, and high economic instability, just to name a few. Banks have had to take cost-cutting measures in response. How has this impacted the business strategy of TRDATA?
As soon as Russia was hit with sanctions, companies here faced cost cutting measures much earlier than, for example, in Europe or America. As a result, many companies, including us, had to quickly adapt to the new reality, which now exists not only in Russia but also in other countries.
Half a year ago, we made the decision to focus our product line on improving the efficiency of banks and other financial institutions. The offered products vary based on the size of the business, their turnover, their functional capabilities, and their budget. This way, banks have more room to maneuver in times of crisis when there is a big need to cut costs.
How exactly is TRDATA’s product line useful for banks during the crisis, at a time when cost cutting is important?
Our line of products consists of three solutions.
The first provides for the exchange of financial data, allowing users to share contact information and also attract new customers who may not have trading platforms like Reuters or Bloomberg. Our platform allows you to do this for free.
Secondly, we provide a platform for risk management and monitoring of limits on counterparties and instruments. This is a practical tool because currently, banks are either forced to use expensive platforms or, conversely, to use Excel, whose functionality is neither scalable nor stable. Furthermore, Excel does not provide accurate data consolidation in real-time.
What we offer is a product that is on par with the functionalities of our competitors, yet still fits into a smaller budget.
The third solution automates workflow with private clients, providing them with prices for transactions. The three aforementioned solutions provide banks with a competitive advantage and an opportunity to optimize their costs.
Are these solutions primarily for emerging markets?
We don’t have a vision of providing a product exclusively for developing countries. Rather, the reason for our focus on emerging markets is due to the fact that there isn’t an established system of information flows, including transaction data, in these markets. Furthermore, my career has always been focused around CIS countries, so the question of which market to start with was evident as this is familiar territory for me. Of course, we now have clients in other countries, so we’re ready to play on the world market, too.
According to data provided by the Central Bank of Russia, there are 665 banks left in Russia. At the beginning of 2008 that number was 1,136. In Ukraine the number of banks is similarly falling. How has the decrease in the number of banks in Russia and Ukraine affected TRDATA’s business?
The banking crisis began in 2007/2008. From this moment, the share of the market in financial market data, which includes the risk management market, should in theory have decreased. But the market is growing at 5% a year despite the fact that the number of banks in the world is decreasing and people are getting laid off.
The main market growth within financial data is due to growth of risk management. The industry is striving toward greater efficiency. The flow of money is being redistributed and the market is not shrinking. People need data and, more importantly, they need to manage this data. Demand for high-quality data and analytics is not decreasing, but only growing.
What can make TRDATA’s solution more attractive to banks than, for example, Bloomberg’s offerings?
Our main advantage is that we can provide solutions for different budgets and specifications. We don’t refuse to work with banks and companies unless they’re willing to give us a lot of money for these solutions. Instead, we assess their turnover and individual preferences to create a solution within the discussed budget.
Bloomberg was started in the ‘80s. Today it is a large and stable organization. But because of their size, Bloomberg is slow to change and adapt to market innovations. I sometimes equate them to a large ship, fully loaded and slowly going down the current, while we are a small boat that can deftly maneuver along the river. The ship cannot enter the areas that we can access with ease. Because we are younger, we are open to everything new and innovative.
How did the decision to expand TRDATA’s product line arise?
TRDATA is an informational and analytical platform that provides market data. This is our flagship product. The typical user who registers on our platform doesn’t just look at news and data, but actually uses them to trade. When trading, he has to calculate the risk, and only after a risk assessment does the trader decide whether to complete the transaction or reject it. After each such decision, the trader returns to the platform to access more financial data, creating an ongoing cycle.
Accordingly, the solutions that we offer are not independent of each other, but instead represent an organic chain through which the business process flows in financial organizations. This is why we can’t claim that solutions for risk management and trading are really different because they complement the main product, bringing everything full-circle.
We want to give clients a finished product that fulfills all of a user’s needs: data exchange, trading, risk assessment. We want to help traders and analysts at all stages of their work.
In a few words, how did you come up with the idea for this startup?
For many years, I studied the distribution of data, the workings of the internal bank system. During my career, I discovered a great desire to find solutions for problems faced by me and many of my fellow traders. Eventually, I decided to do exactly this.