Peter, before becoming CEO of Lucera you formerly held several senior technology and trading roles at other firms and have built many large scale trading and analysis platforms. How involved do you still like to be in the day to day design and implementation of new system architectures?
Well truthfully not as much involvement as I would like - I’m a technologist at heart and love nothing more than to spend time discussing system architecture, the lower level the better! However, I have a great team here and for the most part they run with the design of new features. We run very group oriented design sessions and encourage everyone to have input. I am very involved in the larger design choices and try to guide features as they fit with our strategic goals.
Lucera was founded in 2013. What gap in the market had you identified at that time amongst FX trading firms who were looking for high performance infrastructures and how did you go about filling it?
Coming from outside of FX we saw a few different things. The market was highly fragmented and there were a lot of technology issues to surmount to be successful. We built our software defined network (SDN), Connect™ to address the fragmentation and the large scale connectivity that you need to manage to participate in the FX market. Once we deployed that we started to look more closely at the marketplaces and realised that we could build an end-to-end solution that addressed a lot of the issues we saw. This realization became Compute™ and LumeFX™
What type and range of clients is Lucera providing services for and where are they located?
We have a wide range of clients - small trading firms, IDB’s, non-bank market makers all the way to tier-1 banks - almost all of which are located globally. Our products are built in a modular fashion so a client can perhaps begin with a hosting deal using Compute™, then realize they need connectivity via Connect™ and then our API normalization service and finally they may see they need to use our full FX platform product LumeFX™.
So we find that our clients grow organically. As their business and technology needs grow they find that Lucera can offer components that accelerate that growth.
Lucera is able to provide a very comprehensive end-to end service. How important is it to be a one stop shop in this line of business?
I believe it’s very important to be able to offer this. I often talk about Lucera being an “App Store” or ecosystem. Our goal is to provide the tools to reduce the friction of onboarding new clients/venues/data-centers/asset classes.
In what major ways have you seen the trading infrastructure requirements of FX market participants changing and evolving over the past few years and how has Lucera responded to this?
The technology and infrastructure requirements have certainly changed in the last few years. As the electronification of the FX market has continued, the need for better and more reliable infrastructure has increased.
Speed and determinism are the two most important things that you need to optimize for, with the latter, in my opinion, being the most important. We are a very data driven company and are continually monitoring and analyzing all aspects of our platforms to ensure we are delivering on these two goals for our clients.
How much work still needs to be done on communicating to the market the benefits of FX connectivity as a service and are you surprised the “penny still hasn’t dropped” for many?
I think a lot of people get it and we are seeing more and more that it’s becoming something that people understand and use to accelerate their business.
How would you define the key operational and cost benefits of the managed connectivity service model for FX trading firms?
Lucera Connect™, our SDN product, lowers both operational and capital expenses. From an operational standpoint it allows you to quickly view and analyze all of your connectivity in one place in real-time. In addition our end-to-end packet capture and real time flow analytics give you a detailed view into all aspects of your connectivity. All of this comes from a single connection to us - no capital expense maintaining all of this connectivity and supporting infrastructure.
The Lucera platform has been designed and built by traders who have run high frequency trading desks themselves. How important was that in helping you to develop a unique suite of products and services that differentiate you from many other technology providers?
Yes, this was certainly an integral part of us being able to develop the product the way we did. Coming from a trading background we knew what was needed in order to make the system usable by traders - a demanding group at the best of times!
Our litmus test when releasing a feature or new product was; would we use it. At all times we strive to ensure that our products don’t get in the way of our clients doing their business, while at the same time ensuring that there is transparency throughout.
Lucera Connect™ is your connectivity management solution. Please tell us a little about how this works and addresses many of the networking challenges facing FX trading firms?
Connect™ is a software defined network - SDN. We manage physical connectivity and present Connect™ as a flexible abstraction of these physical connections. The details are a little technical for this article but more than happy to discuss with any of your readers if they want to contact us. It addresses a lot of the challenges inherent in not only the FX market but increasingly, as electronic trading increases and becomes more fragmented, across all asset classes.
The Lucera Compute™ service has been designed to help accelerate a trading firms time-to-market. How does it do that and what key fey features and benefits does it provide?
Compute™ is our hosting and managed services offering. We offer bare metal server hosting along with virtual machines and clients can mix and match both offerings. Once a client is using Compute™ they can quickly and easily spin up connectivity on-demand using the Connect™ product.
Let’s also talk about your distributed FX platform LumeFX™. In what ways has it reinvented the matching engine and provided a much higher level of control over FX trading and order routing?
LumeFX™ was initially built to prove the concept of Connect™ and Compute™. It’s a pretty amazing system - extremely scalable and designed in a truly unique way which lends itself very well to the FX marketplace.
It’s a highly configurable system giving its users a very granular level of control over all aspects of the system in real-time.
How does the Lucera business model assist FX trading firms to secure and future proof their connectivity needs to ensure they are on a continuous performance upgrade path and remain state of the art, flexible and scalable enough?
At Lucera we are continually pushing the envelope in terms of performance and security. Our roadmap for Connect™ has significant performance enhancements giving us massive scalability as we push Connect™ to the next level.
In addition we are starting to look at Connect™ in terms of security and how we can support real time threat detection and mitigation into the next generation of the product.
How are fully managed network and infrastructure service providers like Lucera lowering the barrier of entry for FX trading firms looking to access the Emerging Markets - particularly in Asia, Middle east, Latin America?
As I mentioned in an earlier question, offerings like Compute™ and Connect™ provide firms with a turnkey solution to start a business. Top class infrastructure and connectivity with minimal cap-ex, minimal op-ex and month-to-month contracts. As a firm’s business grows we can scale with them
Is a clients’ trading strategy always going to be the most important factor that determines the type of connectivity solutions they should adopt or other considerations, for example the quality of service they will be getting, equally or sometimes more important?
I think all of these these things are important parameters in making a decision. Connectivity, or indeed any service, is only as good as the support and quality of service you get. As a trader you need to ensure that, whatever service you are using, you have the utmost confidence in the service provider and their ability to adequately support their product. At Lucera we are continually striving to ensure our clients get the highest quality of service and support possible - 24/7.
Every now and then the FX market is thrown into crisis by something completely unexpected. How can the managed service model help to protect FX trading firms from future “black swan” and disruptive events?
Well as it relates to technology and infrastructure I believe the managed service model, when deployed correctly, can be a great asset in times of market volatility and stress. From having the ability to quickly scale up capacity - compute or bandwidth - or having real-time network analytics alerting you of unexpected market events due to massive increase in traffic to having infrastructure built and managed by a global team of experienced industry veterans who have seen many of these same events throughout their careers
How will you be looking to grow your business around the world during 2019 and what plans do you have for launching new products and services?
Lucera is expanding in 2019! We’re in the process of hiring some sales people both here in the US and in London. In addition we are working very hard on the next generation of our Connect product.
We have many new features continually being released for LumeFX - support for NDF’s, Outrights, FX Options and Swaps to name a few. I am also very focused on growing our managed service offering this year.