Steve Plestis, former MD Head of Credit Suisse EMEA derivatives business, has joined OpenGamma as Head of Sales. We caught up with Steve to find out his reasons for joining and how things are going so far…
Can you talk us through some of your previous roles?
I’ve been in the derivatives industry for almost 25 years – the first 10 or so at Merril Lynch, the last 14 at Credit Suisse.
At Merril Lynch I covered various positions – client service, sales trading, fixed income, equities – and also spent 2 years in Germany as a Eurex sales trader
At Credit Suisse I was brought in as sole sales person for listed derivatives, building the EMEA sales team for that division over my time. In my last 2 years of tenure I ran the cleared derivatives business for EMEA where I was responsible for sales, product development, client service etc.
Why did you decide to join OpenGamma? What was the pull?
I met up with our CCO Joe actually, having known him from CS. I was interested to hear more about the OpenGamma product and was immediately taken by the value proposition. I then spent some time with Peter and Max and gradually the idea of working in a specialist firm directly related to my field of experience (i.e. cleared derivatives) became more and more appealing.
Once I had understood the value – and the quality – of the product (endorsed by the fact that OG already had a number of blue-chip firms as clients) I recognised there was an opportunity for me to make a significant, positive impact – after that the decision was easy.
It’s worth adding here too that I have not been disappointed. Even in the short time I have been here, I have been really impressed by the focus and the speed with which decisions are both made and implemented. It’s a team of hugely talented individuals.
How does this differ to previous companies you have worked for?
With it being such a small and intimate environment, everybody knows everybody and you immediately feel like you’re part of a family rather than a huge organisation. People are keen to share their views and opinions but ultimately everyone is focused on the same goal. In an investment bank often business units are working towards different goals which can make things difficult.
The thing that’s surprised me the most is the speed at which things can get done – product developments, onboarding clients, getting legal agreements signed – which can now be weeks instead of months.
The other major difference – and part of the reason I joined – is the ability to influence change. A quick discussion about product development can move straight into implementation if the suggestion makes sense. With an investment bank, multiple committees and bureaucracy are required to make any sort of change.
One of the similarities to an investment bank is the drive to be successful. Given the size of the firm and the fact we are a ‘FinTech’ there is often a misconception that we are more laid back and casual. While it is true that the dress code is very casual (no suits), actually the focus by everyone to make a successful business is very similar to that of an investment bank which I really like.
How is the financial industry changing?
The financial industry has clearly changed considerably over the last 25 years. Most recently, regulation has had the largest impact and continues to affect both the sell side and the buy side. Firms need to constantly evolve and adapt to ensure they are compliant with the myriad of regulations and this costs time, money and effort, which is ultimately a drag on bottom line.
What are firm’s key challenges for 2019?
How can I answer this question without mentioning Brexit? With 3 months to go, we still have uncertainty as to whether we’re going to have a hard or soft Brexit – or even another referendum and potentially no Brexit at all. For any firm, managing uncertainty is incredibly difficult and this is no exception – this is without a doubt going to be the greatest challenge.
Putting Brexit aside and focusing in on the derivatives space, another key challenge (driven by regulation) will be the next phases of uncleared margin rules. On the plus side, at least with this there is certainty as to what these rules are and when they come into play.
The requirement for IM to be posted (by both counterparties) on the majority of bilateral derivatives using SIMM (Standard Initial Margin Methodology) is going to require firms to rethink the way in which they manage their derivatives portfolios and activity. They will need to review and understand the capital requirements across bilateral, cleared and cross product margined portfolios, how they are distributed across their various businesses, and assess the best way to deploy this capital in an efficient way.
The concept of return on capital has always been important and this additional capital burden (potentially very substantial) will just force firms to look even more closely at the way in which they capitalise their business.
How are you enjoying working at OG so far?
I have been really impressed with everything so far. As soon as I joined I felt like part of the family and was able to get ‘stuck in’ straight away. I have already been able to make a positive difference (I think) and am excited about the prospects we have. It’s not often that you can point to regulation as being a tail wind rather than a head wind, but our product is strong, our client base is growing quickly and the pipeline is healthy. Roll on 2019!