This week, Finance Magnates got the opportunity to catch up with respected Fintech veteran and Umstel Founder, Alexander Sologubov. See the FM interview below:
Question: “What was your journey to financial markets and technologies?”
When I was studying at university I dreamed about a broker career at a stock exchange. A kind of extremely dynamic work with a high risk involved. Every related book I read with passion, and I was engrossed with an idea that one day my dream would come true.
After I graduated from university in 1999, I did not think much about what to do and connected my professional life with trading and investment in financial markets. In the early 2000s, I took the position of Head of Brokerage. My responsibilities among others included to setup dealing desk operations from scratch and overseeing company exposure and hedging systematic risk. It was an ideal choice for my profession.
As our trading volumes raised, we have found ourselves in a situation when we had to adopt some technologies and solutions to improve our speed and quality of order routing and execution. That was the moment when my focus shifted to Fintech and product management.
So, since that time, I have almost 20 years of experience in the Fintech sector resulting in developing successful financial systems and multi-asset investment platforms. Also, I was a founder of one of the first mobile investment mobile applications in the financial industry and led several successful projects including the one that became the first top -forex brokers in the world.
Question: “What was the most challenging project of yours?”
It goes without saying that the Umstel investment platform was the most challenging project, and the longest one.
Since 2012 I have been working on different types of solutions and technologies related to financial services. Back in that time, we had already developed one of the best in the industry web-based financial charting library, supporting all basic and advanced technical indicators and drawing tools. Web technologies were not at their best during that time and to be honest we spent a lot of effort to deliver a high-quality solution. In parallel, we had been developing financial charts for iOS, Android and Blackberry. Do you remember Blackberry? Can you imagine financial charts in a Blackberry smartphone? No, me too, until the very moment when one of our developers made it happen.
Question: “How did you come up with an idea to make an investment platform? What does ‘Umstel’ stand for?”
Step by step I was approaching the idea about the investment platform. The first project that had been released with the use of all our existing solutions was Tradingidea.com, a community of traders exchanging trading ideas in the way of sharing to other users technical analysis and fundamental studies for 10000+ financial instruments: equities, ETFs, indices, commodities and fx.
Integrating and redistributing market data for 10000+ instruments required a high-performance server technology. That is how Umstel server was released. ‘Umstel’ stands for Universal Modular Server Technology Eliminating the Limits.
Question: “What was your role in the development process? Did you use any innovative technology or approach?”
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I worked on server architecture, user and admin interfaces. The server has an innovative approach, comprising of independent modules. The modules interact with each other through the core interface. One module can call a command of another or can send a notification to multiple modules. This approach enables a high level of flexibility in development. For example, after the stock investment trading platform had been released (www.umstel.com) it took us only a couple of months to release a crypto investment platform (Coinvenue.io) by replacing a couple of modules in the server infrastructure.
During the development process, we faced many bottlenecks, which have been successfully solved by our genius developers. As a result, we managed the server to handle 10 million messages per second exchanging between modules. 1 million quotes per second can be easily delivered to an unlimited number of online connected users.
It was not only about the server where we had to struggle for performance, more issues we had faced in the user interface, web-based investment terminal. For example, to minimize the traffic between the server and the client application we send not a full quote but a difference between the current quote and the previous one as an integer number. As a result, we have significantly reduced the size of each quote in bytes and traffic in general.
Question: “What are the main advantages of the platform that make a difference to other platforms in the market? Is there any unique idea behind it?”
Well, first, we analyzed our targeted users before we started designing the interface. It was 2013 when we created a focus group with traders from different brokers, and this question has been addressed. To our surprise, we have realized that traders voted for a simple interface and cost-effective transparent trading, suitable for different strategies: from long-term investment to short term trading. Thus, we have decided to go for a simple-to-use client terminal with a focus on user experience. As a result, we have managed to achieve easy navigation, fast inherent instrument search functionality along with the advanced charting solution, comprising of:
- Multiple charts mode supporting trading from charts
- Custom timeframes
- Charts with technical analysis are saved in layouts on the server and synchronized per user across all connected terminals.
- Algotrading and backtesting against historical data back to 1970.
Another advantage of the platform was integration with different stock exchanges for direct market access. The trading in 10000+ instruments was as transparent as any trade has been registered on an exchange and could be found on the exchange website. Such integrations were offered to brokers for free.
Finally, the main advantage in my opinion was free real-time market data delivered by major exchanges. Umstel had an agreement with BATS exchange and hold a redistribution license to an unlimited number of end-users. As a result, brokers, utilizing the Umstel investment platform and their clients could use real-time market data-free.
Question: “How did the pandemic affect the investment sector in your opinion?”
Well, obviously investments in financial markets became much more popular during the pandemic, especially in the equity market. We could see increased interest from US retail investors in their domestic financial markets. As a result, the market cap of tech companies skyrocketed.
As you may have noticed, more and more CFD brokers added CFDs to their stocks during last year due to increased customer demand. Trading stocks with leverage on earning reports have become so popular, like trading on NFP years ago. Now, social networks and forums play a key role in stock market movements attracting more retails investors to the financial markets during the pandemic time. And, for some of them, it became the only income source.
Question: “What are your views on the future of financial markets and technologies?”
In my opinion, the future of financial markets depends on financial technologies and solutions from other sectors, like marketing, sales and retention.
Unlike financial technologies, where I do not see many opportunities for something new to come up since cryptocurrencies have been introduced, other related sectors have a lot of innovations and improvements. For example, new affiliate software, tracking and messaging systems, payment solutions, social networks can lead to quite interesting integrations that can bring financial markets to the next level, especially the retail sector.