Dubbed ‘the eBay of the FX market’, LMAX Exchange brings world-leading FX operations to traders of all shapes and sizes. Their revolutionary approach to foreign exchange (FX) trading; providing speed, accessibility and transparency in a level playing field environment has caught on quickly in the marketplace.
As a disruptive influence LMAX Exchange have found a way to make their innovative business model a major player and trendsetter in a world of trading platforms, earning them rightful place at the top of the Hiscox Tech Track 100 last year.
One year after featuring in first place, we speak to CEO, David Mercer to see what’s happening at LMAX Exchange and if they’re still making waves in the FX market.
How have things changed since landing the number 1 spot in the Tech Track league table last year?
Since then we’ve continued our trajectory of rapid growth and global expansion with offices located in Hong Kong, Singapore, New Zealand, Tokyo and the US. We’re currently serving clients in over 90 countries and have traded $4.5 trillion notional volumes to date.
LMAX Exchange remains a leading player within the UK tech sector and was recently selected to join Tech City UK’s Future Fifty, a government initiative that supports the country’s fastest growing digital companies.
Has it opened up any new opportunities?
As a leader and innovator in FX trading technology, we’re very involved in the wider technology community through regularly sharing in-house developed best practices by inviting other institutions on-site and actively contributing to the open source community.
Being recognised as a technology leader has certainly contributed to our credentials in this space and meant we can continue being a catalyst for change in the industry.
How do you keep ahead of your competitors?
At its heart, LMAX Exchange is a technology firm. Our differentiated business model and the innovation that we are bringing to the capital market is a result of our proprietary, cutting-edge technology. As a business, we continuously invest in all aspects of our technology to deliver value to our clients and stay ahead of the competition.
LMAX Exchange created a new template for foreign exchange, how will you cope with upcoming competition and copycats?
We re-write 30% of our code every year and continuously evolve our product so that our technology remains ahead of the competition.
The FX market is very competitive and is known for innovation. We welcome this competition and remain strongly committed to our mission of transforming the capital markets into a transparent, level playing field for everyone involved.
What have been the biggest challenges in the last year?
High growth and rapid international expansion have their challenges: hiring and managing talent, keeping abreast of multiple market issues and managing logistics have all presented their own hurdles as we grow overseas. These challenges haven’t held the business back and by the end of 2014, we had set up offices in the US, Hong Kong and Singapore, and delivered a Tokyo-based matching engine to provide clients in Asia Pacific with ultra-low latency execution.
What’s your next business goal?
The company shows no sign of slowing down and we plan on expanding further into North America next year. The ultimate goal is to become a leading player in global FX and continue to take risks in order to change the $5.3 trillion/day global FX market in the next three years.
Do you foresee any future risks to the business? How will you mitigate these?
There is considerable regulatory change taking place within the FX market and the industry is undergoing a period of transformation driven by technological innovation. This is an exciting time for FX and we are committed to growth, and continuing to innovate in order to be at the forefront of industry change.
You’ve called LMAX Exchange a “catalyst for change” in foreign exchange, how will you continue to influence/change the market in the long term?
Technological innovation is disrupting traditional FX market practices. Companies such as LMAX Exchange are improving efficiency and cost-effectiveness that will generate long-term change for the industry.
However, the most important change the market is facing is more fundamental. Market makers and regulators are demanding greater transparency and openness in market practices. This is a debate in which LMAX Exchange has a strong presence and continues to set the agenda. Our products and opinions are starting conversations around how foreign exchange can continue changing in order for the industry to be as efficient as possible.
How do you think tech startup culture (and Silicon Valley) has influenced the wider business community in the UK?
There is no doubt that the business community is becoming increasingly digital, and the best UK businesses understand they need to be active in the tech space if they are to be successful. Tech startup culture has moved beyond Silicon Valley, an example of which is LMAX Exchange, which, from our headquarters in Shepherd’s Bush, has managed to become an industry leader. Digital founders and disruptors can operate from anywhere and I think as more people realise this the business community in the UK will flourish.
Look out for our reporting on this year’s Tech Track 100 results as well as our new tech editorial series launching this Sunday 6 September – and get involved using #geektopeak