The Futures Industry Association made innovation the theme for this week’s annual conference in Chicago and for the first time had an innovation pavilion with early stage technology companies offering solutions that could help the industry.
Andreas Preuss, CEO of Eurex, cautioned the industry against getting too caught up in the innovation wave sweeping financial technology.
Speaking on a panel of exchange leaders, he said that innovation requires space to work without inhibition, it requires creative chaos. As soon as creative chaos is curtailed, the innovation capability begins to decrease.
“All of us represent organizations that are mature. We are not at the forefront of innovation any more. All of us at some time in the past were massively more innovative than we are today and it is difficult to instill top notch innovation in an organizational structure that works in a very structured fashion against chaos.”
He suggested the industry might score a 6 out of 10 on innovation.
“A trading platform that was brand new three years ago is not completely new now and may be completely outdated five years from now.”
Jeffrey Sprecher, chairman and CEO of Intercontinental Exchange (ICE), which owns the NYSE, said the industry’s conversion from analog to digital forced everyone to innovate around technology and forced markets to think about how market making is done today, and how liquidity is formed.
“There was a tremendous wave from the year 2000, and more recently a wave of consolidation that was unlocked by technology. My company bought a lot of small businesses to acquire the people or the technology, or both, to try to bring entrepreneurs into our eco system. We continue to look for people who are breaking the mold.” ICE tries to create an atmosphere of calculated risk taking, and using feedback from failures, without retribution for those involved.
That’s hard, he added.