Originally published in Harrington Starr’s The Financial Technologist (2nd Edition)
By: Eric Einfalt, Chief Strategy Officer, Eventus
When we launched Eventus at the end of 2014, we had one goal in mind: provide a better mousetrap to firms in the capital markets space to efficiently meet their obligation to surveil their trading activity and manage risk. Fast forward seven years, and we have made huge strides, with our Validus platform deployed at tier-1 banks, digital asset exchanges, broker-dealers, market centers, futures commission merchants (FCMs), buy-side institutions and more. This is a testament to the power of Validus – no other trade surveillance platform gives clients a comparable level of flexibility, integration and automation tools, nor do they cast such a wide net and escalate only the most actionable alerts.
Winning market share in this fiercely competitive space requires the best technology, deep expertise and constant engagement with a wide variety of constituent groups to understand the challenges they face. Our product and approach have produced a passion about the Validus program among its users, and word-of-mouth referrals to their industry peers have led to explosive growth for us each year. In the past 18 months alone, product demand has led us to nearly quadruple the size of our team, and Eventus has won business in new regions and asset classes. We continually enhance the platform to help clients sift through the noise in an automated way, affording them the ability to focus on items that matter the most. Here are a few key highlights in what has been a very successful year for our team.
Digital Assets in the Spotlight
Household-name cryptocurrencies like Bitcoin and Ethereum continue to make headlines in 2021, surging to new highs at various points throughout the year and capturing the attention of Main Street and Wall Street alike. But Eventus began winning exchange clients in the digital asset markets space years ago, and we’ve quickly become the global leader with a dominant position in the trade surveillance space for cryptocurrency exchanges, complementing our strong foothold with market participants in equities, options, futures, foreign exchange (FX) and fixed income.
Meeting the needs of this community has required the flexibility our platform provides, and our ability to easily scale has been crucial as digital asset exchange clients have seen explosive growth in data and trading volumes; as regulatory guidance on digital assets evolves, the intricacies of trading particular instruments may vary significantly or be only partially understood by the wider investment community. Despite this, Validus is the gold standard solution for this asset class for the same reasons as in more traditional markets. We meet exchanges’ extremely high security requirements and offer the ability to surveil, 24×7, billions of messages per day in real time. For non-exchange players in the capital markets ecosystem, we serve as a bridge as they build out their digital asset desks, offering our clients expertise and a comprehensive offering they could not experience from either legacy surveillance platforms or vendors focusing on just a single asset class.
The digital asset space is currently one of the most exciting subsets of our industry, and the story of institutional investors wading into this space continues. As more exchanges and other financial institutions look to trade digital assets, we are uniquely positioned to help them establish, meet or exceed industry standards for market surveillance, anti-money laundering and transaction monitoring.
Eventus has quickly gained recognition as a thought leader in the digital asset space, as evidenced by our recent Shining a Light on Digital Asset Markets 2021 virtual event, which assembled leading names from top regulators, exchanges, trading firms, asset managers, media outlets and more. We are proud to name four of the top six crypto exchanges (according to CB Insights’ Blockchain 50 list) as clients.
What’s more, our efforts in this area have served to deepen relationships with existing clients in addition to winning new clients. Hong Kong-based OSL Digital Securities, Asia’s first Hong Kong Securities and Futures Commission-licensed digital asset platform for institutions and professional investors, recently integrated our transaction monitoring capabilities on top of trade surveillance, for which it has leveraged Validus since 2019.
We are particularly proud of the global nature of our client base – and while we have experienced growth in markets the world over, there has been a significant uptick in the Asia-Pacific region. Over the past year, we have won several new APAC clients, some based in the region and others that have a regional presence.
New clients include Morrison Securities (our first Australia-based client and the No. 1 broker in the Australian Securities Exchange equity derivatives market), G.H. Financials (an exchange-traded derivatives firm with a Hong Kong subsidiary) and Mercury Derivatives (a proprietary trading firm with over 500 traders on six continents).
Working with these firms across different jurisdictions within APAC, as well as their various arms around the globe, has required a keen understanding of local regulations and how they fit into the global regulatory landscape. To that end, we hired Vincent Turcotte, who has spent much of his career in the region at some of the world’s foremost financial institutions, to grow our APAC business out of Hong Kong. These dedicated efforts on the ground and client adoption in the region resulted in our winning Best Market Surveillance Tool at the WatersTechnology Asia Awards 2021.
Having an outstanding product is a critical prerequisite for growth. Our Validus platform uses machine learning and robotic process automation to enable users to cast a wide net for detecting relevant market behavior and escalate only the most actionable alerts for deeper investigation. It features hundreds of pre-built trade surveillance and risk-monitoring procedures, and we now provide a sandbox environment to test and quickly deploy new procedures/calibrations.
Informed by extensive client input, we constantly enhance Validus. Here are just a few of the hundreds of new features implemented in the last year:
- An automation recipes tool, giving clients the ability to automate mundane, repetitive tasks and enabling managers to promote efficiency and track relevant trends
- Robust alert audit-trail functionality that enables managers to supervise surveillance analysts more effectively, escalate issues promptly and provide accurate, comprehensive documentation in response to regulatory inquiries
- A signals analytical tool to help users monitor statistics, develop trading profiles and detect anomalies over time
- Enhanced insider trading functionality
- Enhancements to Python scripts, empowering clients to quickly customize and integrate procedures
- Technology improvements to substantially accelerate speed and throughput for an ever-increasing message load
Looking ahead, we see numerous opportunities for future growth, and not just in digital assets or in APAC. The principles that define our solution are universal. As long as there are markets, there will be a need for tools to ensure fairness and protect all participants. We stand ready to provide these capabilities to financial institutions of all types, no matter what innovations come next.
Eric Einfalt is Chief Strategy Officer of Austin-based Eventus, a multi-award winning global provider of trade surveillance and market risk solutions for financial institutions. For over 25 years, Eric has served in operations, business development, finance and sales roles across a diverse set of organizations throughout the capital markets space.