The World According to a 4-Year-Old, and the Real Business of Foreign Exchange

The following conversation with my 4-year-old daughter happened just a few days ago:

Her:    I really like China, it sounds like a great place.

Me:     Why?

Her:    They have the best toys in the world there.

Me:     How do you know?

Her:    All my favorite toys are "Made in China."

I stopped asking her questions.  But my mind quickly went from wondering about the origins of toys to wondering about the origins of the capital markets business applications I encounter these days.  These applications rely heavily on functions like alpha-seeking and execution algorithms, and foreign exchange aggregation, to name a few.  I’ll elaborate on others in future posts, but the point is that this is a high risk environment, not child’s play.  So where do the ideas for those functions come from? 

A few Apama customers I have met lately note that the markets seem to be acting like a bunch of 4-year-olds having temper tantrums.  They noted wild swings in the FX marketplace, for instance, since the credit crunch became a crisis a few months ago.  FX trading will continue to be frantic this year. But necessity is indeed the mother of invention, which is a good thing with the markets the way they are.

This week, we announced that Standard Chartered Bank has gone live with the Progress Apama FX Market Aggregation Accelerator.  We’ve talked about FX aggregation before, and have done a number of similar Tier 1 deployments.  As you would expect, some great ideas in these projects have been customer-driven.  And when I look behind the scenes at Apama, I see how these projects provide a springboard for people to think of new things and try them out.  

On my very first day at Apama, a new colleague walked up to me and said, “I solved a problem that was bugging me.  Do you think customers might like this too?”  These ideas tend to grow into a demo, which may become the basis for a collaborative deployment, and eventually a customer has built on the idea and taken it in a new direction – a similar Apama story can be found here. 

Yesterday someone asked me if I think that Capital Markets firms are using technology to save cost or to grow.  Cost savings?  Yes, at least, and for some that may be the end of the story and the mind is closed.  But a former manager of mine, now a colleague and adviser, taught me to listen to the markets by telling me, “You have 2 ears and 1 mouth, use them in that proportion.”   A similar philosophy serves software firms, as well.

Funny that this week, one of my Wall St. friends at a very alive firm wrote to tell me his opinions about the state of software evolution, and the importance of innovation.  I think the crisis will force patches of growth and innovation.  Do you?  Comments welcome.

-Dan