Interviews with Leaders in Fintech & Web3
Interviews with Leaders in Fintech & Web3
Unraveling Retail Trading: Insights from Elina Pedersen on Fintech Innovations and Leadership
Eager to unravel the intricacies of retail trading and fintech innovations? Join us as Elina Pedersen, the dynamic co-founder and Chief Revenue Officer of Your Bourse, shares her fascinating journey from the fast-paced world of Admiral Markets to spearheading her own venture.
Through Elina's insights, gain a unique perspective on the rise of retail trading and how it sets itself apart from the institutional giants. She offers an inside look at the motivations behind launching Your Bourse, emphasising the critical role of technology in bridging gaps for retail brokerages and enhancing trading safety and conditions.
In an enlightening conversation, we cover the transformative trends shaking up retail trading, from the essential role of data centres and low latency to the emergence of brokers crafting their own trading interfaces. Elina provides an honest account of navigating the competitive fintech landscape, particularly as a female leader in a predominately male field. She discusses the hurdles faced by startup brokers and the pivotal importance of education and advanced tools for success. As we reflect on the historical evolution of the trading industry, Elina's candid insights leave us pondering what, if anything, she would change about her remarkable career.
Takeaways
- Retail trading is speculative trading for personal gain.
- Elina's journey from marketing to CEO showcases rapid growth.
- Identifying gaps in the market led to the creation of Your Bourse.
- Your Bourse connects brokerages to execution venues and risk management.
- Low latency is crucial for trading efficiency and scalability.
- AI is simplifying developer tasks but won't replace them.
- Prop trading is a new trend in the retail trading space.
- Gold remains a popular trading instrument due to its predictability.
- The broker technology space is competitive and knowledge-intensive.
- Leadership requires transparency, feedback, and addressing blockers.
Elina Pederson https://www.linkedin.com/in/elina-pedersen-59676014/
Matt Cheung https://www.linkedin.com/in/matthewcheung50/
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This is Matt from Working Fintech, and welcome to another episode of interviews with leaders in fintech and web3, and today we're delighted to be joined by Eleanor Pedersen, who's the co-founder and chief revenue officer of YourBoss. Welcome.
Speaker 2:Thank you, matt, thank you for having me your boss welcome.
Speaker 1:Thank you, mad. Thank you for having me, and so so I guess let's let's jump straight into the area that you, you live and breathe in around, kind of trading and retail trading. You know there's, over the last decades or so, there's been a big rise in people trading themselves. You know spread bettas and fx platforms and, more recently, crypto platforms. Can you just talk about what is retail trading and how you see that market?
Speaker 2:yeah, sure. So I guess, if we go back to the definition right, retail trading is anything that has to do with speculative trading, right? So it's trading for someone's personal gain and not necessarily for the gain of an institution. So if it's an institution, then you would have different tools, you would have several people in the analytical department, you potentially have some software development. I think it's a bit less in the retail trading. A lot of it is just by a click of a of a button, but also I can see that there is more and more sophisticated retail traders. And another important thing is that it's not really an investment, as often people would perceive that it's an investment, but actually it's almost a full-time job, if I'm honest yeah, so so very speculative, um, if someone's getting involved as an individual.
Speaker 1:So so you've been in this industry for a while and, uh, in the previous company to you know, before your boss, you were admiral markets, where it looked like from uh, from an outlooker kind of look, looking in, looks like you rose from you know, working in marketing all the way up to the top as CEO in a very short amount of time. Can you talk us through that journey?
Speaker 2:Yes, of course I was young. I was really young when I joined Edmorals and it was a growing company and when I joined it was 33 people if I'm not mistaken, and it was 33 people if I'm not mistaken, and when I assumed more of like a CEO role, we were 350. The interesting part of Admiralus was that we really strived to have a local office in any country possible, so we had to deal with a lot of localization in terms of marketing, in terms of sales process. It was really really kind of like a local company where we really had to manage. We work with different cultures, I think. You know, in terms of the growth or the rapid growth, I'd like to think that part of it was of the growth of the company. But at the same time, you know, I was.
Speaker 2:I guess it was the attitude that I approached the company with, because I always had a can-do attitude when the, whenever there was a challenge, I would jump on it and in a sense, I was really fortunate because I worked directly with the UBOs, alexander Tsykilov and Petri Lausch, and they were incredibly encouraging. They were really supportive and in general, the culture in the company was that if you think you can do it. We will support you as much as you can. We will give you not necessarily all the resources, because sometimes the resources are not available, but if you have an idea that we think could drive us forward, we will do our best to provide those resources. Or let's do it with the minimum resources, but let's try it out, and I think that really, really fit well with me as a person and the growth of the company so why did you leave?
Speaker 2:I didn't. You know the funny. Well, I didn't quite. I can't say I left. I I became a non-executive director at some point and the owners are still really really good friends of mine and I don't know if I can displace it. We do work with animals a lot in your birth. But yeah, I just had this urge you know to. We saw I think we will maybe speak about it but I saw a gap in the industry and my husband is from the same industry, so we saw that gap and we were really eager to feel it. So that was the main reason. It wasn't anything to do with the company.
Speaker 1:And so is that how your boss got started. You identified a problem when you were working in the industry, and what was the motivation then for going, you know, head first, kind of straight into it?
Speaker 2:so back in the day, the way the financial industry worked, at least retail brokerages they didn't have the access to the technology that, let's say, banks would have, and banks would really often rely on the internal technology.
Speaker 2:So the brokers, especially the ones who wanted to operate in a more sophisticated matter and more like a proper financial institution, they had to develop something internally. And of course, when you develop something new there are a lot of teething problems, and we had that at Admirals. You know, my husband had that in his company and you kind of you learn by developing a product, but by the time you've developed it it becomes a legacy technology. And if it is a legacy technology it's not very scalable, like you can't package it, you can't share it with others. So I guess there was enough knowledge that we both had that we wanted to share with the industry and just to make sure that everybody can benefit and ultimately, actually that the end trader would benefit as well, because this would allow the brokers to provide better trading conditions, you know, safer business and, yeah, just a better trading environment. Really.
Speaker 1:So your boss today? What exactly does it do?
Speaker 2:So, in a very simplistic way, we connect different brokerages to execution venues, but we also allow them to run their own risk books. We connect different trading platforms to, again, the matching engine, the execution engine. That's our core product. We allow them to um. Actually, you know, if you think about it, it's like a backbone of a broker. So whenever the client sees the front end, the trading platform, that's the client experience. But in order to be able to provide that, there needs to be something fast and agile on the back end, because the order, when the client clicks a button, it has to go somewhere.
Speaker 2:Something has to happen, it has to be booked in the correct place. Happen, it has to be booked in the correct place. And if we think about it, it's actually when I think about it, our brain perception and response time is 13 milliseconds. If you think about it like I don't know if you get hit or not, it's just the perception time. The actual response time for you to move or do something is 250 milliseconds. Now our system operates in 20 microseconds and we're improving it currently to 120 nanoseconds. You know there has to be scalability in what we do and we are incredibly good at ultra low latency. We have several patterns. So yeah, that's, I guess, the simplistic way of putting it.
Speaker 1:And is that deployed on the cloud or is that deployed locally at the customer?
Speaker 2:Well, you know and this is a really interesting question because you will find that it's a bit of a holy war what do you do? How do you do it? We are all about bare metal, because we think that we can optimize best when you're sitting in a financial data center, we can cross-connect the liquidity providers to banks. We can fine-tune the hardware as well where when it's in the cloud. Yes, there's certain benefits of weekly scaling up, for example, but you will see that, unfortunately, it hasn't been implemented so far in the financial industry as much as you would expect it to in the financial industry, as much as you would expect it to, and I think, unless someone like Equinix decides to go into that cloud space we might still have to wait for it a bit longer.
Speaker 1:Can you elaborate a little bit on this world of colos and data centers and bare metal and low latency, Because for some of the listeners of the show they might not be familiar with that, Actually the nuts and bolts of how that works. Could you just explain it?
Speaker 2:Well, I'll try, I guess, okay.
Speaker 2:So the first things first.
Speaker 2:It's one thing when someone clicks a button and if we look at institutional trading environment, right, let's put HFC, high-frequency traders aside, or high-frequency trading funds aside If we look at just general trading environment, for institutional needs, such, as you know, upsetting certain risks, it's a matter of a click.
Speaker 2:You know, the price very often is not as important because it's more of a hedging strategy, and in that case what you will find then latency is not as important and maybe even the frequency of transactions is not as high as when, for example, you're looking at retail traders, because there are brokers that have, I don't know, hundreds of thousands of traders trading at the same time.
Speaker 2:And when that happens and they all trade at the same time and some of them use algos and those orders have to go into the system, you have to make sure that they're executed well in a central venue, or there has to be a way to book those trades correctly. There has to be a way to book those trades correctly. So it becomes a very intensive operation to run, and that's why we've actually been successful, because we are in our space, we're the fastest on the market and we're the most scalable, so I don't know if any numbers matter. We can process half a million trade events per second on one CPU and this is fully scalable, so yeah, so when you move into retail, the capacity becomes important.
Speaker 1:And what kind of trends do you see for technology in kind of what you're doing in your realm? Is it very much about speed, robustness and scalability and always improving that. Much about speed, robustness and scalability and always improving that. Or is there some other bigger technologies kind of on the horizon that might completely kind of change the landscape?
Speaker 2:You know, I think in terms of technology, we would be the one who is disrupting the industry right now, I would say because we actually bring some ideas from the institutional space into retail space, such as having a matching engine, you know, in a central order book. But at the same time and I spoke with our developers as well before I got on this podcast and I said look, what is what and what do you see in your space. And they say that ais do really simplify their work. Like it. It won't be, and actually I guess that's another interesting subject that maybe comes up a lot Like will AIs replace developers, for example? I don't think that this is possible in our space because the optimizations that we have to do, they involve a lot of intellectual property, because it's just, you know, it's not out there, you won't be able to just put it in the eye. That produces the code, you know. But there are certain things where, in terms of their work, they can use AIs to help I don't know write release notes or things like that. So they say that it simplifies their work, say that it simplifies their work. If we look at retail trading industry, then I would say that there are more and more brokers out there who create their own trading interfaces because they see that as their IP and they really try to make it as user-friendly, as intuitive as possible, and I guess that came from all the neobanking kind of background. But if we look at the business models, that's something again very interesting, because our industry used to be very different 15 years ago and if you'll speak to someone in the financial industry, they will definitely say you know there was an S&P event that happened in 2015, which affected a lot of financial companies and you know it also affected the regulations a lot. So the retail trading industry became a lot more scrutinized. So you would see some brokers moving offshore to get out of that regulatory umbrella.
Speaker 2:And the most recent development in that movement is what would be called prop trading. It's not real asset management or fund management. It's more of a company. It's brokerage companies that position themselves as educators and what they say is that we will give you a trading challenge. So ultimately they call it a challenge. You go on the website and you can buy a challenge for I don't know there are different types of challenges, but I don't know 200 pounds. So you buy this challenge for 200 pounds and they impose conditions on you. Like you know, there is there's going to be this much leverage, your maximum drawdown can be this much, so they kind of tell you how you should be trading.
Speaker 2:Now, if you pass that challenge, you get into a next stage and next stage and the final stage of the challenges is then funding your trading account. So they would go oh Matt, here is £250,000. You still have the same limitations as on your challenge account, but now you are becoming a prop trader, so you're trading with our money and we will pay you a share of profits. So it's actually a really popular concept. It's not just you going and opening an account and, you know, passing through the KYC and depositing your own money. It's kind of like it's under the educational umbrella, because you're actually funding an educational environment, a simulation of real environment, and it really revived the industry in a way. But the regulators are now looking into it, so I don't know which way it's going to go, uh, but it definitely. It definitely created a lot of uh news I was a prop trader 20 years ago.
Speaker 2:I used to trade futures, so maybe you should actually know some of them do offer futures as well, so maybe you should actually know. Some of them do offer futures as well, so maybe you should try that.
Speaker 1:Yeah, the industry kind of started 20-odd years ago. There was a lot of FX trading and then kind of starting to add in other types of asset classes like trading stocks and CFDs and so on, and then more recently there's obviously been lots of crypto trading in the last 10 years and then things like altcoins and so on in the last few years. What do you see as the trends for different types of instruments and asset classes that people are trading in retail trading?
Speaker 2:You know it's still predominantly it's going to sound funny, but it's still predominantly gold and gold futures, for example, and it's an. I guess when I say it's an easy one to trade, it's a lot more predictable, but it's a challenging one for the brokers because it's really hard to hedge that position out in the market, especially with brokers offering more artificial trading conditions. So if you look again at the retail trading industry less of the institutional trading industry which you will find is that you'll find all sorts of artificial conditions like zero spreads and this and that and leverage one to five hundred and things like that, which doesn't exist at all on the institutional stage, right. So when that happens, then of course they need to be a bit more sophisticated in how they find a way to hedge that position out and become this goal. That's really predictable. You know there is volatility is volatility wise? Again, it doesn't work towards the broker's advantage. It becomes incredibly challenging.
Speaker 1:But the most of the most of the volumes we see is in gold, certain uh indices, which is footsie and, yeah, just the standard currency pairs in the in the in this industry is, although industry, particularly on the broker side, it's very competitive, but it sounds like you're essentially providing the technology to the brokers. Is there many people in? Is there kind of many competitors against your company or typically people trying to build this stuff themselves?
Speaker 2:I think they're well.
Speaker 2:No, the competition, I would say, is quite rough in our industry, predominantly because, unfortunately, the brokers learn about the technology or whatever they need to have in their technology often too late, and it's a knowledge-intensive industry.
Speaker 2:So when you speak to dealers or even sometimes founders, you will find brokers being founded by traders and they understand how trading works, but they don't necessarily understand how the risk management works. So a lot of them do fail, unfortunately, and that's why you know there are different types of companies out there. Some of them perhaps are not able to provide the benefits that we provide or some other market leaders provide, but they're able to provide a cheaper price and very limited functionality and, as in the beginning, perhaps they haven't learned what they will need in the future. They haven't acquired that knowledge yet they would go for that kind of offering. So I find this, I guess, one of the most challenging things is actually educating startup brokers. When you're speaking with someone who's been in the industry for a longer while, then that becomes easier. But then very often they would also have understanding of what kind of tools they need and they might be looking into very sophisticated integrations or very sophisticated algorithms which, again, we are able to support, but it is quite a competitive industry to be in.
Speaker 1:In your previous company. You said when you were at Admirals you were talking about this very kind of open culture where people can try things and they get the backing for it, and that kind of culture is very much fostered. How have you created a culture and what's your kind of culture is very much fostered. How have you created a culture and what's your kind of approaches to leadership in your current role, because you're co-founder, co-ceo and chief revenue officer, so how do you kind of approach that in your boss?
Speaker 2:I think it's a bit of a humbling question, isn't it? You know, for me personally, transparency is very important and, uh, feedback is really important. And when I say feedback and transparency, I don't always mean that I would go to my team and I would tell them everything. I think, no, uh, not necessarily that uh, two-way street. So I find it that, as a leader, I expect as much input from my team members as much as I give them.
Speaker 2:You know, it's often, I think, in the beginning of this leadership journey, and even specifically back at Admirals, I often befriended people to the point where sometimes I felt that maybe the targets are not quite met or it would affect my perception of where we are going. I think I do a lot less of that at the moment. And if there is a blocker, I need to know about it, and because we're all working towards a goal, and if there is a blocker, it doesn't matter if it's a personal blocker. If it's a work-related blocker, I want to know about it and I want to help the person to you know path. So, as a, I think, as a, as a leader, I I don't, I I feel like right now it's a lot about being very soft, but I'm definitely not a soft leader, if that makes sense. I'm the one who would want to have a difficult conversation.
Speaker 1:And how have you coped in an industry that is predominantly male? Financial markets, trading, financial services is a very male-heavy industry. How have you found that journey and I suppose what skills and tools in your armory have you brought into that that someone who's a male leader might not have in your armory? Have you?
Speaker 2:brought into that that someone who's a male leader might not have. I do think that I do think that the more male dominated the industry is, the more testosterone there is in the room, the more they need females, kind of to. You know, glue it together and make sure that it doesn't fall apart in a way. You know, actually, my journey I was thinking about it quite recently and I've been thinking about males in my life in a way that affected my career and you know I had most bizarre stories but at the same time I had also most inspiring males and leaders in the financial industry. If I think, like I've mentioned, alexander and Dimitri.
Speaker 2:But if I think back to my mentors, you know, one of the first mentors I had was, again, he was male and he just saw the talent in me and he didn't mind that I was female or that I was a young or, you know, I was like trainee. He didn't mind that, he really took it and he really helped me build that confidence. And he really helped me because I would, you know, in the beginning I remember I would sometimes kind of shy away, but he built the confidence for me to be able to say, oh, actually, you know what? Wait a minute, I have something to say and I really want you to hear me out, and that's thanks to those people that surrounded me. But of course, I had like bizarre, bizarre, bizarre situations when someone would expect me to bring them coffee because you know they'm an office manager, but actually they booked a meeting with me. So you know it's been, it's been a very interesting journey, definitely and, yeah, I'm glad.
Speaker 1:I'm glad to be a part of that industry it sounds like you had some great bosses and mentors along the way. So I suppose, going back, if you were to start the journey again when you were 18, starting out in your career or thinking about what you were doing, would you do anything differently.
Speaker 2:I don't know, I don't think so. There was a period of my life when I looked at it and I thought am I on the right path? Is this what I really want to be doing? You know there are people who are curing cancer and you know there are people who are colonizing Mars. You know, maybe I want to be doing that.
Speaker 2:Actually, when I look back at it, I was very you know, we have different goals and when I was younger, I can definitely say that one of my goals was generating wealth, because I came from, I was born in Estonia, still during the Soviet Union times and when everybody was made equal. So for me it was a part of my DNA that I wanted to grow, dna that I wanted to grow. For me, that wealth was the confirmation of the fact that I'm on the way. So I don't think I would have been able to achieve it in any other industry. Now, at the same time as our values change, I've realized that it's not about the industry. I realized that it's more about who we are and we don't like. We can make a difference in any industry and we can still be true to our values. So, no, I I wouldn't have changed anything, because it made me who I am right now.
Speaker 1:And what would you say about for people kind of starting their careers, about getting into fintech as a sector? Our financial technology is obviously a rapidly growing area and there's lots of different facets of it as well, lots of different types of areas of fintech. What would you say to kind of people looking to get into your side of fintech?
Speaker 2:your side of fintech, I think and you know, I guess it goes back to the values. I think it's really important that your personal values are aligned in a way with your work, because for me personally, it's kindness and courage, and when I say courage, it means doing the right thing, no matter what right, and I can be doing that in my job 15 times a day. Right, it can be small, it can be large. It's just having the courage to do the right thing. Now, and this is going back to this period of life and I thought, oh, maybe this is not what I want to be doing. Maybe I want to volunteer and go and work at NHS full time or something like that. But no, I realized that we can do it in our work and we just need to understand what we stand for, because very often and this was my confusion in the beginning as well, and I see it more and more and I see a lot of friends struggling with it Very often especially I don't know if it's a trend people seem to separate their work from their life and they say this is work-life balance.
Speaker 2:I work from nine to six and this is all I do, and that's why I feel good right. This is work-life balance. I work from nine to six and this is all I do, and that's why I feel good right. So I feel this is the most destructive thing one can do to themselves, because if you separate your work from your life, you're taking out a massive part of your life and you're not enjoying it. Part of your life and you're not enjoying it. So as long as you can entangle your values in your work, you can truly make it your life's work, and I personally I feel this is the only way we can be happy I think that's really good advice.
Speaker 1:I've got a final question for you is you're you're working in a technology company and you're, from what I understand, you're, not a developer, you're not a coder. Can you, can you just talk about the opportunity of other job roles in a fintech company outside of just coding? Because I think people have a misconception that you need to be a developer to kind of get into this industry where there's there's lots and lots of developers who work in these companies but there's also lots and lots of other job roles. Can you just talk about kind of all the opportunity in your company and in the sector as well?
Speaker 2:Oh, yes, of course, most certainly. Well, anything that is commercial or that is human-facing, because, as much as we need developers, we always still work with humans, right and it's very often about, again, personal values and being the right person for the role. It's a lot about empathy. So we work in the industry where a lot of money is involved in trading, right, and for some people it's a very, very touching subject, which is understandable. So a lot of it is providing that human-like support. So there would be customer support representatives, there would be a sales director, sales business development managers, there is a lot of marketing related roles, a lot of community management roles. So we do quite a lot of community management because the dealers themselves are quite fragmented.
Speaker 2:So in the brokerage you would have a dealing department or risk management department and it's a know-how of the company. So very often it would be guarded and because it's so guarded, people do not share and they don't have a platform for sharing. So what we do at Yorbus, for example, we do a lot of knowledge sharing and we get a lot of people involved in that from marketing background or PR background or even like writing background. We have some people with, like even you know degree in English, for example, and it's a lot about community management. It's a lot about events. It's a lot about events. It's a lot about speaking about the difficult subjects. You know. It's speaking about the trends. So I think there is so much more to any fintech company than just coding and even qa. So you usually you would. I think a very good QA would be someone who clicked the platform before a lot and understands the whole chain of events. But the person doesn't necessarily have technical knowledge.
Speaker 1:And how can people get in contact with you or follow what you're doing?
Speaker 2:I'm very, very, very very approachable. My LinkedIn, alina Pedersen. Feel free to message me. It's actually my personal goal to try to respond to as many LinkedIn messages as possible, so even if it's someone approaching me to sell something, I never ignore it. I would say, oh sorry, I would actually spend a minute to look at it because I think sometimes they're great ideas. So LinkedIn is probably the easiest way, but of course, my email. It's super simple elenajoboscom. And yeah, any possible method is fine.
Speaker 1:Elena, thank you very much for joining us today. Thank you, matt, it's been a pleasure.