welcome to the fintech files podcast where we investigate careers and concepts in modern finance today i'm delighted to have hirander misra the chairman and ceo of gmx group and sectex as a guest hirander welcome to show hi george delighted to be here thank you for having me it's great to have you and it's the second time we talked last time was i think a year ago or a bit longer than that so there's a lot that happened since and what has changed in the podcast is now we try to make the two-part conversation and this part will be about careers and later on we'll discuss about tokenization but let's just jump straight into it looking at your profile on linkedin there are a lot of roles and i can only imagine how busy you are but what can you tell us about your main role at gmax and sectex sure yeah many jobs are on salary as i like to joke but in terms of gmex as chairman and ceo i co-founded the firm just over nine years ago and our focus is very much on traditional markets but also digital assets markets and markets that kind of combine those assets from a trading clearing and settlement standpoint mainly to do with regulated markets because regulation in digital assets is fast evolving we took the foray into launching our own exchange ecosystem in the seychelles called uh set decks the securities commodities endurances exchange about 18 months ago and that's been growing steadily as well and we see a need for kind of hybrid assets that are very traditional and digital in that environment it's a fascinating word of the market infrastructure that's evolving fast but for this conversation i'd like to go back to where it all started and ask you about your background and how you got started into finance and technology yeah absolutely so i i graduated in uh 1995 from the london school of economics and actually surprisingly i wasn't very tech savvy at that time i'd done an economics economic history type degree and then as it so happened i ended up as a graduate getting my first major role in reuters actually on april fool's day 1996 of all times and as i got into that space it was all about real-time market data and trading they've always been interested in sockets changes but then realized that more so than the stock exchanges themselves if they'd all gone electronic or at that time at the following year they were going to be even more electronic and order driven the everything was about technology enabling the business but the business guys didn't know about technology and the technology guys didn't know about business and very quickly i got interested in both and then whilst i was still at reuters i got so interested that i thought i didn't really know about the technology i'm using it but then ended up doing a masters at city university in business systems analysis and design because i realized that this could be a really niche if you knew about both and actually since then i've never looked back because i joined internet which was a subsidiary of reuters as an agency broker they'd set up lots of markets in the us in the 1990s and from there on in co-founded a platform called chi-x that became the second largest um exchange trading venue in europe and and then after that set up gmax in earnest where we spun out of a small stock exchange so i think actually it's really interesting technology's been at the heart of everything i've done ever since actually and also the case now as well it seems now technology is prevalent in everything and is at the center of every conversation in my times in the market it was from what i remember as a sales and sometimes there was an important part of the technology but we'd never talk about it it seems now technology would be at the center of many more conversation even between clients and and sales people in different firms people want to understand what's going on yeah it's really interesting because many organizations early on that we worked with the technologists were always seen as the inferior species at that time when you go back to 25 years when i started my career and it was okay don't thank them if things go right but lambaste them if things go wrong it's almost like being a goalkeeper in goal in football in many ways and then from that here on in it's changed because increasingly even on the business side prerequisite is someone that's technology savvy which doesn't mean you have to program or you have to configure a network but you need to know how the underlying technology works and and how the products or the service offering is enabled predicated on that a lot of that's been driven by the change that we've seen you know big techs come in and everything we do is intertwined with technology but it's been no different in markets because even the trading desks have got a lot savvier from algorithmic trading and program trading that started to develop early on when i joined internet in 99 but now is even more sophisticated and then artificial intelligence coming in and then on the postgreat side blockchain so i think the need to understand technology is greater than ever before what i would say is though we see some people falling into the trap of using technology or or referencing technology for technology's sake ultimately we've got to remember that it solves a problem and if you can solve a problem in a different way and more efficiently then we're all for that but if you're mainly replicating something that is already done and there's no value add then you have to question the way that you're using it and going back to your career can you tell us a little bit about what led to the launch of it yeah it was interesting the name itself spared a thousand conversations because it was greek after the letter kai and then someone called it chai someone called it chi but we we joked we weren't into greek at that time the team and we didn't do greek letters of the alphabet very well internet had always been a pioneer as a company in terms of electronic trading networks and since 1969 had something in the us that in europe a lot of competition was stifled by you know certain rules that meant that the stock exchanges have been around for hundreds of years it was mandatory in most cases to trade on them or report to them as well and so there were kind of barriers to entry but a regulation called the markets and financial instruments directive that came in at that time changed it because it meant that competition could come in properly for the first time but it but a lot of this infrastructure was still controlled by those exchanges so we had to think about how to do this with an internet we we had a big client franchise we were already uh trading big blocks of shares away from those exchanges and then reporting them but we saw the opportunity and it actually is really interesting because when i first looked at it with the internal team the project manager with an internet at that time but we said first things first how do you get our data out there so people can see it and at the time devil devin venig who became the ebay ceo was running that division so cheekily as a junior i sent him an email and lo and behold he got someone on it and we got our data out there one reuters and it was visible and then the next step was to make that tradable which kind of spawned the whole tracks initiative everyone thought it wouldn't work because liquidity had never moved but we realized that actually if you combined our institutional flow from the buy side clients the asset managers on others and you combine that with market making from these new quant driven players who are using technology then all of a sudden you could do what the banks were doing in terms of market making but that they had less of an appetite after the financial crisis and and that led to us all you know ahead of the financial crisis as well but that led to it to do that then all of a sudden we got 30 of the london stock exchange trading on us and 25 percent of all the other major european it was phenomenally enjoyable and it was a great success story but i learned an incredible amount from it and the alumni all over all over the city and beyond now they're doing different things yeah what a rich experiences must be and so can you tell us about how you moved on from that into your current role absolutely so you know with chi ex what we did was you know all of a sudden all the major banks and trading houses came in as shareholders and there was a subsequent exit of that business to a large exchange group called that's global markets which in turn is always m a in our game you know that george as well but there was a subsequent acquisition by cboe markets the large u.s exchange group but at the time i saw an opportunity to move beyond that type of model because i saw regulation was changing and there was a need to have an exchange in a box that you could then provide to others and make it much easier for people to set up or entities to set up exchanges and get market distribution because we've seen those barriers to entry whilst there's waiting for the exit from chi exams as advising a small exchange rival to the lse same market called plus markets and they'd asked me to come in and now with my co-founder who was then cto build an electronic business for them and rather than do another x we were embracing this exchange in a box model plus fell into trouble because listings were down during the financial crisis michael spencer with icap bought the exchange but we decided to do a management buyout of the technology and icap became our first customer it was a great opportunity because sometimes you're a little bit scared to go your own way and you've done it entrepreneur entrepreneurial in a way but under a larger firm this time the opportunity presented itself as moving house we were having our first child at the time and i decided yes we're gonna we're gonna do this you know and and take on all the stress at once and effectively spun out and what was then gmx which was called forum training solutions which was renamed was created and i think nine years later we've never looked back so it'll be interesting when we have our 10-year anniversary people talk to me about exits but actually every year i say we're only now just beginning to have fun right because the market's evolving so fast and things are changing and you've got to reinvent yourself that actually almost seems like a new role every other year even since we last spoke about 18 months ago you know fascinating and can i just ask a little bit more about chair x and by the way being greek i would say yeah and how was it moving from a company where you're the first employee to i don't know how many employees and people and activity did you have towards the end yeah so it's interesting in the end we ended up having about 52 employees in that business at that time and actually being the employee number one was very interesting and then having set that up even before the entity and co-founding it was a phenomenal experience because in a large organization you see one part of it there's a lot more division of labor and you don't get to see something front to back and and living creating it and then forging it so it was an excellent grounding because it taught me really how to become an entrepreneur but actually at the time it was taking risks and doing it when we spin out but effectively it was somebody else's money that you were that you were using and so you were getting paid to learn but at the same time we created an incredible amount of value you know that investment in us was vindicated we say we because in the end it's not about the individuals it's a team but actually those lessons held me in great stead because when i realized that actually after chaox i was getting lots of offers very senior roles um to either lead exchanges or or or to be number two in them depending on the exchange and some of them were very lucrative but actually at that time i was ready for a new challenge and and not to be completely corporate but entrepreneurial and do things and take more risk and actually the lessons that i learned being an entrepreneur then when when i put up my own money and and there was more risk it allowed me to learn from those lessons and avoid some of those mistakes that you would make as a first-time entrepreneur and i think for every entrepreneur i remember one of my bosses at chai xm ed nichol who was there who ended up being very successful when he saw the internet business he said look how is it going i said it's quite difficult there's a lot of there's a lot of pseudo barriers to entry you said miranda who's american if you don't swing with that you don't make the home run and that's resonated with me ever since because a lot of people kind of get put off by not trying but if you don't try sometimes you've got to take an educated guess assess and but you've got to try with the view that yes you may succeed and you're always positive that you will every entrepreneur has highs and lows as well and you've got to get through those uh which is always interesting was it a calculated risk were you considering your a worst-case scenario or were you just very focused on the opportunity ahead yeah actually it was a letter we're very focused on the opportunity ahead and i always believe that being positive forges more opportunity because it just instilled an environment where that positive attitude drives more success and and and so you didn't really consider failure what i did do was just part caution has said okay a large part of what i got from tri-x is going to be invested into what we do and again for the first 18 months there was no salary etc and things like that it was all put into the business that i i reinfenced a smaller amount and said okay whatever happens not going to touch that because that's almost like an insurance policy which isn't a big one but but you know it allows you to get back on your feet and so whilst you're always thinking that you think actually sometimes it's important to be a little bit balanced because putting all your eggs in one basket entrepreneurs there can be some cost fallacy as well but people get very emotional about what they're doing but ultimately you're right with a family or or looking at what you do going forward don't be scared of failure because there will be highs and nose as i mentioned but at the same time just you know hedge a little bit as well it's not a bad thing now going to to gmex let's talk about your recruitment i know you're operating in different countries what are you looking for for example when you recruit someone yeah it's an excellent question obviously we've got we started out in the uk and we've got an office here albeit you know more now more and more people are getting used to working remotely as well at the royal exchange in the center of the city hasn't been used that much but then we also opened about four and a half years ago in office in mauritius and more recently over the last year with set decks we also opened an office in the seychelles everyone jokes why these exotic holiday locations but actually when to us it's always about work and we say yes it's the island strategy but in reality we saw opportunity with a talent pool bilingual that it is in in really well educated and good resources and less transient as a pool of you know resources and human capital than some other centers where there's much more competition for for resources now it's interesting we've got people across eight different countries now from india to botswana to france and ultimately it's really interesting because what we found is since the pandemic everyone talks about various entry on technology coming down and more cross-border activity but actually the barriers to entry on employment have come down as well because people don't have to be transient and move somewhere to get roles now a lot of the big banks from the west have been recruiting in india and you know where people even in india were again moving to the big financial centers or big technology cities like mumbai bangalore hyderabad now a lot of them are working in smaller sensors and still being employed because there's no need to move and have the higher costs of moving in some ways that's also created competition for that labor call and salaries have increased markedly during the pandemic because demand has gone up on on fintech but at the same time it's been great for you know individuals who are looking for employment because it's broadened their options and it's also made the labour market and what they do much more international as well and we have conversations every week with the major banks in the tier 1 tier 2 institutions and we've got people on the call from tel aviv and israel to to guys in india to guys in the us the guys in the uk which you'd expect but there's more and more people from emerging centres on we've got a project at the moment with a large integrator we've got teams in poland and ukraine that we're working with and we ourselves are looking at portugal now as a development center so it's really exciting actually i think for an individual coming into this market if you're willing to look broader than the country that you live in and the possibilities are endless actually and how does how does the formal education and diploma plays a part of it is it is it an essential thing or can now people work learn at some other parts of on their own or through a different path it's interesting because people used to make a lot of degrees in graduate trainee programs and going through that whole thing and my experience in university until i did my master's in technology in business technology essentially that was more practical my experience was when i came out after three years of my undergrad i wasn't prepared for work at all and in the olden days the uk system now everything's renamed university but the polytechnics focused on working four-year degrees one year work experience and when you came out you're really prepared now of course it's quite difficult because undergrads are looking for internships because they realize that valuable experience is important whilst they're undertaking their degrees we've been we've been fortunate we've signed up to a few internship programs and we've got interns where there's now you know one from singapore working with us on global projects and another one from malaysia as well with anything now going back to your question we look at kind of practical experience where there's no practical experience we look at the capacity to learn the ability to think outside the box and think laterally rather than vertically in fixed mindset and for us that's more important than a degree unless in certain professions let's say you're recruiting in an accountancy discipline or elsewhere then you need some kind of professional qualification or the legal discipline professional services but otherwise we're very open because some of the best entrepreneurs have fallen out of college and they dropped out and done things others haven't even been to university come across um you know recent entrepreneurs in fintech ventures that are incredibly successful one of them hasn't graduated but then set up his own business hasn't even has it even gone into employment as well so i think you've got to have an open mindset on this because there's some great people out there with and without education a formal education in terms of a degree yeah this landscape is evolving so quickly and would you have it's a bit of a generic question but would you have some advice to younger generation that are interesting in this field of finance and technology what would you advise them so the younger generation have a distinct advantage over let's say my generation when i started employment 25 years back because when i look at my children here 114 and 1 is 10 the way that they leverage technology my daughter's better at powerpoint than i am and i thought it was reasonably good now over here too many investment decks and pitch decks but but you know they've grown up with technology and they're increasingly savvy with it my daughter was talking to me on next topic that we'll talk about subsequently you know about nfts and the whole social media angle and things like that so kids already are very interested what i would say is that that interest they're beginning to already think about it and try and apply that in a practical sense so if you're interested in fintech and finance i think it's much the same as you mean to go on take that try and ask questions and absorb from those around you and see how that applies to what you really want to do i remember interestingly i got into stock markets and i realized that i wanted to do something to do with stock markets because in the olden days that there was the old teletech streams on tv that had the share prices and my father used to look at those before and after work religiously every day and i got interested in what he was doing and all i could see was he's not on a tv screen but that's what got me into finance and in turn got what got me interested in technology so i think the younger generation should keep up that interest and i think any work experience is important my my daughter's already thinking about when she's 16 how she takes work experience in this space i said to her i'm not doing any favors going don't place yourself in a job like anyone else because i had no nephew there but as youngsters i think it's important to think about that because even though your career aspirations may change it gives you a flavor for what work is ready and that could be anything from i've never seen i've never seen 16 year olds at doing a levels in my daughter's school and they're they're in waitrose doing multitude roles to others that are having work experience in banks it doesn't really matter yeah so basically you have the chance to go for it and and try it out without waiting really yeah it goes back to that whole adage it's even as an entrepreneur why isn't everyone an entrepreneur because they wait around all the r and i'm sure you've got many friends george where they they say okay i'm going to do x and a y and z but you've got to put the whole hard yards in and you've got to make it happen because sitting on the bench it just doesn't happen and i would say if you want to do something go and do it try it if you don't like it it allows you to try something else it sounds like a cliche but they really should follow their kind of dreams and aspirations because those opportunities are much more abundant now because the technology barriers to entry are much much lower and through social media and connectivity they're much more wired into these opportunities than you and i ever could have been right they use that information they can use it to develop their education their career as well and we're seeing them do it as well these kids are much smarter than i was you know when i was their age and much more street smart as well going back to your cv on linkedin and all these involvements i wanted to get a glimpse how it works for an executive in your position and how you juggle all those roles and i'm just going to read a few fincomico arabian boars digital partner networks and many more right yeah it's interesting because what i love about what i do is that no two days are ever the same so you don't have that kind of feeling of groundhog day and repetition because actually the day is very busy and because you're working across multiple time zones you know you can wake up sometimes to 100 emails which actually sometimes you think actually now with the pandemic you're starting earlier and finishing later it's that demarcation point at home but at the same time no tea days are ever the same and actually really does feel like an adventure what's important actually is okay some of those are non-director ships or some are kind of synergistic rules to what we do already i think sometimes you see that point in even investors and others raise a point and it may look like we're doing a lot of different things but we always have a core focus on and i do personally on the corporate butter market infrastructure digitization of assets that opportunity and and how that transient transcends into digital finance lowers the barriers to entry reduces friction and costs and makes things more efficient and and i think i've always been motivated uh by changing um the landscape and changing the way things are done rather than being motivated by money because i think if you enjoy what you do you focus on that and you drive change the success and with it yeah even the remuneration everything else just comes with it and so i think it may seem like a lot of different roles um you know again i've reduced a little bit of that uh over the last year or two as well for even more focus but at the core of what i do is this offer as a service platform as a service and ultimately that's driven by regulated finance and and so essentially without any entrepreneur focus is important but at the same time that doesn't necessarily mean you have to just do one role because uh a multitude of roles sometimes can actually help improve all of them and make it better and and ensure that they're all even more successful yeah and i think that's also a sort of a trend but it's very interesting what you mentioned about the money because this podcast is about investing but you're not the first one who says that the key is not that it's to have a higher purpose and i will finish with one more question which is a bit personal about monies how do you like to invest your own money when i first started out i was investing following in my father's footsteps in the stock market and i always found because if you're technically investing you've got it on the pulse all the time and if you're fundamentally missing you've got to do a lot of research and reading and then with long hours with work and everything else the focus wasn't always there so actually what i naturally found out was even though i was enabling others that the firm was enabling others to trade all over the world my strength lane private investing you know private companies or incubating startup companies as well as investing in some of them and building value and actually that's become a real hobby because okay we've incubated a lot of interesting projects we've also come together with other co-founders and have invested in projects as well from a very early and seeing some of those grow is incredibly exciting that on that journey and then some of the partners and entrepreneurs i've ended up working with and continue to work with is also incredibly not only exciting but you learn an incredible amount because everyone has a different perspective and background so i think for the foreseeable future i continue to be excited and i'll continue to uh privately invest but of course that will always be proponents of public markets which which equally offer opportunity so i guess it's finding your niche and what you're good at really i remember just listening to a podcast about the founder of blackstone so the giant uh private equity group and apparently his his starting point was a bit similar he was working public equity as an analyst and he found it frustrating that even public markets he didn't have the whole information whereas in yeah private markets he can be fully involved have the full information and and therefore it finds more enjoyable so there you go great mind meet and i thank you very much for all your answers here under we're going to finish here this first part and we're going to continue later to talk about tokenization so i'm very excited to hear your thoughts on it yeah i look forward to it and thank you very much for having me
2021-10-18