[ C O V E R
S T O R Y
|
C AT H Y
G I B S O N ]
MiFID II at the start of last year,
in conjunction with the increasing
electronification of trading and
available data. These three factors
– not to mention harder to define
elements, such as Brexit – mean
that buy-side firms such as RLAM
must be better prepared to adapt
than ever before.
Much like its peers, RLAM is em-
bracing developments in technol-
ogy and data to aid traders and the
desk in general as much as possi-
ble. The firm appointed a new head
of data strategy last year to bolster
its capabilities in this area and
Gibson says this will be an ongoing
focus for RLAM, to create tools and
resources that aid both the trading
and investment processes, as well
as enhanced client reporting.
Gibson says that it would be “out
of touch” to say that its data is
where she wants it to be, because
“that space is changing so much
that it’s never going to be a case of
being done with a full stop. It will
always be an ongoing process for
us all."
Likewise, the adaptation and
adoption of technology creates
its own set of issues. While the
buy-side in general are happy to
espouse on the new opportunities
technology can provide, Gibson
takes a slightly more pragmatic
view of the issue, informed by the
position of RLAM as a “traditional
asset manager”.
“We are not technologists, that is
not our subject matter expertise,
so for us, it is a matter of buying
"I would love to say that most
technology is plug and play, but
unfortunately it's not, so there is
a lot of cost involved."
46 // TheTrade // Summer 2019
[ C O V E R
S T O R Y
|
C AT H Y
G I B S O N ]
“You need to take on a role or
function, become a subject
matter expert in it and then you
need to ensure you can pass that
on to your team."
solutions rather than building them ourselves,” she
explains. “Even when you buy solutions you still need
to have the knowledge associated with it, because
someone has to evaluate 10 different execution man-
agement systems, for example, to come up with the
best option.
“With most technology there is no single best provid-
er out there, you really review what you have internal-
ly and try to find the best fit. I would love to say that
most technology is plug and play, but unfortunately it’s
not, so there is a lot of cost involved.”
That is not to say that Gibson doesn’t see the advan-
tages and opportunities that technological develop-
ment can offer to the buy-side, and she says that she is
fascinated by the evolution of artificial intelligence.
RLAM currently utilises for some of its quantitative
models, although there is still a long way to go until AI
can be used as an outright investment decision-making
tool in the active space.
“For me, the fundamental issue in the investment
space, especially when you step out of the passive or
quant-drive investment strategy is that markets aren’t
always rational”, Gibson says. "It's very difficult for AI
technologies to capture the irrational part of the mar-
ket and, arguably, humans are better placed to do that."
While technology may be able to bring some level of
clarity and optimisation to trading processes, much
of this development is being driven by changes in the
regulatory environment. MiFID II has had around 18
months to bed into the European markets but remains
the key factor for determining market complexity, buy-
side strategies and technology implementation.
Gibson highlights how regulation is impacting on
how the firm approaches its use of technology and
the implementation of new solutions, particularly
challenging when compliance itself is not static, or as
she puts it, “a living, breathing piece of regulation.”
One example is changes around trade and transaction
reporting, where even minor alterations to data fields
can open up significant compliance concerns.
“Those pieces of regulation mean that the burden
of regression testing on any changes you have made
has gone up, which in turn means that the costs of
on-boarding and the risks go up,” she says. “Those are
the challenges that we are facing,
but that is an industry-wide chal-
lenge.”
Like most other heads of trading
desks throughout Europe, Gibson
says MiFID III is “just a matter
of time” and that so far, at least,
MiFID II has only been able to
achieve its objective of increased
transparency to “a very small
extent compared to what could
have happened and ESMA is aware
of that.”
Ultimately, regulatory change is a
fact of life for asset managers and,
in conjunction with their trading
objectives, this is where the sub-
ject matter expertise Gibson prizes
at RLAM comes to the fore. It’s a
role that she has aimed to take on
herself throughout her career, in-
forming what Gibson describes as
the biggest lesson she has learned
from her career to date – to always
aim to make yourself dispensable.
“You need to take on a role or
function, become a subject matter
expert in it and then you need to
ensure you can pass that on to
your team, to make sure that the
workflow and process is in place,
and then you can move on to the
next thing,” she explains.
“That’s better for your team
because they are continuing to
increase their ability and knowl-
edge. It’s better for the company
because they don’t have key man
risk. It does sound counter-intui-
tive, but I genuinely believe that it
works for the team, company and
individual.”
Issue 60 // TheTradeNews.com // 47