TK Yap of CGS-CIMB Securities: Future trading platforms as interactive CX platforms
Inside the Sell Side
TK Yap
Group Chief Transformation Officer | CGS-CIMB Securities
TK is responsible for revamping front and back-end technology and operations as the firm continues its growth in the digital space. He is also the Group Head, Electronic Trading Platforms. With more than 35 years of experience in the securities industry, TK is an IBF Fellow and serves on its CMFAS Exam Board.
Our digital strategy is about business transformation, more than mere digital transformation.
Q. Tell us about your role as Group Chief Transformation Officer and your priorities.
As a digital business builder, I see transformation as the essential change management needed to future-proof ourselves. It starts with having the right people in the right seats on the bus, all headed to the same destination. We know the impact of people is a function of talent rather than numbers, and we know they want to see a shared vision and a common purpose. This means reinforcing the “why” from a customer perspective by using simple messages everyone can relate to. A “Yes is the answer, now what is your question?” reflects a “can do” mindset that you want everyone to adopt. The right culture and structure will determine how well we can execute our strategy.
Business operating models are built around customers – without them, we don’t exist. Our priorities are centred around having superior products, efficient technology, and effective scalability because these together define customer engagement levels.
This ultimately leads to the three outcomes that we seek to achieve through transformation – lower Cost- to-Income Ratio, lower cost per trade, and gold standards in customer experience.
Q. Would you say that this role is quite uncommon in the securities sector and how are you driving CGS-CIMB’s digital strategy differently?
Yes. In fact, my background is uncommon for a CTO because I didn’t come from Operations or Technology. I’m a business person who spent over 35 years building client businesses on trading desks, of which the last 20 years were in electronic trading, so I always see what’s needed through the eyes of the customer. The CGS-CIMB digital strategy is shaped around the customer journey. Service engagement levels are always harder to replicate than products.
One example is ProsperUs, our new digital-only investment platform run by millennials for the millennial segment, with functions designed around their preferences and thinking to engage them better.
Another example is the team behind our Marketing Cloud/CRM, which brings an e-commerce perspective, unifying data and customer touch points across all our platforms, including ProsperUs.
Our digital strategy is about business transformation, more than mere digital transformation. We will stick to our core competencies and de-layer legacy monolithic technology. To ensure we have a flexible architecture that is modular and allows interoperability, we will design or buy to customize but not build, and outsource to software vendors who have proven solutions in production. All this sits on a technology stack that includes a virtual data centre and use of cloud to facilitate a DevOps approach.
Future trading platforms will be more than just the execution platforms we see today; they will be interactive CX platforms incorporating virtual assistants.
Q. Trading platforms have become more sophisticated. What is CGS-CIMB’s strategy to ensure you are well ahead of the game?
Future trading platforms will be more than just the execution platforms we see today; they will be interactive CX platforms incorporating virtual assistants. This is what we are working on today for the direct-to-consumer business, served on a single platform in multiple markets, to complement our traditional business.
To get there, we need an engineering culture because of developer-driven solutions especially in the OTC space (FX or CFDs), and the go-fast mindset typical of digital start-ups to drive our platform aspirations. It will have to be an open architecture approach built for open APIs and third-party apps.
Given my low-touch electronic trading background, I see co-location or proximity hosting as a given even among retail customers, who will be using algorithms more often. Clients value system stability and reliability as much as functional enhancements. Operations and Technology, as well as Digital Solutions and Electronic Trading all report to me, so that should signal our intent to stay ahead of the game in trading platforms.
Q. CGS-CIMB and Bloomberg have recently collaborated on automating your fixed income and leveraged products work flows for regional expansion. Why is automation in inherently more complex asset classes (compared to equities, FX etc) important to your strategy?
The evolution of automated trading in fixed income, from a buy- and sell-side perspective, originates from efficiency and scalability efforts. While there has been significant progress in automating fixed income trading, we are still in early days in Asia. The inherent complexity of fixed income work flows – from trading to settlement – results in slower adoption and evolution of the market.
The regional fixed income strategy at CGS-CIMB is an on-the-ground approach to identify efficient technology to build an architecture that allows for product superiority and scalability. Due to our large Asian footprint, it is crucial that we find innovative ways to invest in our operational infrastructure – this allows us to create an operating model differentiated from other brokers. Through our digital transformation efforts, we want to create an edge in this market that is nascent in adopting technology.
With Bloomberg’s automation technology, which is used by many regional and global players, we are able to more efficiently distribute prices, and centralise how we aggregate and manage orders. By connecting to multiple venues, we have more access to liquidity and more importantly, it allows us to manage our client orders better such as the ability to impose margin/limit controls.
Q. How do you think about data and its role in the digital transformation journey?
Our technology efforts are being shaped around Enterprise Architecture (EA) as a strategy, such as embedding tech thinking into business thinking. Data Architecture is one of the four building blocks under EA, and is also one of my reporting verticals under Technology. That should say it all.
Data platform and strategy is absolutely critical in today’s world, not only for analytics and decision making as well as regulatory compliance, but also to raise the level of customer engagement. Digital business builders all have a keen interest in monetizing data so the key is to optimally map a firm’s data maturity to its investments in structured and unstructured data to reap the benefits of leveraging data. This requires a good front to back understanding of the entire ecosystem.
I would also argue that research monetization goes hand in hand with data monetization, and for the new generation of investors and traders, the right delivery platforms (including next-generation trading platforms) will make the difference. Data will be the fuel that sustains us on this journey.