We created the network effect for securities finance. Here’s what’s next for EquiLend

Management Insight

We created the network effect for securities finance. Here’s what’s next for EquiLend

Paul Nigrelli

Sep 2022

I’m EquiLend’s Head of Corporate Strategy and Chief Financial Officer. I’ve been part of EquiLend since 2002, since before our platform went live. Having seen our journey to this point, here’s my take on what’s next for EquiLend.  

Many have heard of the “network effect,” but it tends to be a misunderstood concept. For us at EquiLend, it doesn’t mean “the more users you have, the more users you get”; we believe it means, “the more users you have, the more value they get”. Like all technology, from the internet in its original form to Web 3.0 now, the more users, data and functionality of a network, the more value you can extract. This is the environment we are trying to cultivate for our clients.  

At EquiLend, we have taken 20 years to build our network for our stakeholders globally. We believe we’re the only platform that can provide this network effect at scale in the securities finance industry and we continue to build to make sure our clients get maximum value from what we offer. Our relatively recent acquisition of Stonewain is a great example of this. By vertically integrating our existing solutions into a complete Integrated Platform Solution, we gained the opportunity to further extend our network.  

As a result, we have almost 200 clients whose data covers the entire scope of the securities finance space, in this sense, our industry positioning is entirely unique. Name someone meaningful who is not already connected to or, in discussions to connect to EquiLend. Those outside of our network are few. Our unrivaled vantage point ensures we have an overview of the ebb, flow – and crucially the bottlenecks – across the entire industry. The key now is working out what we can do with this position not only to continue delivering value and scale but focusing on how we can solve some of the industry’s most difficult problems. This is not about making current problems easier to deal with or faster to bypass, but to eradicate them as problems altogether.

Securities finance is an inherently connected industry, yet its infrastructure consists of disparate technology systems, and the errors that result from them are a direct result of each player trying to single-handedly manage and use their data to the best of their abilities. To this end, I am laser-focused on driving meaningful change. We will look to extend our solutions and our market reach by working with, collaborating with, or partnering with other leading FinTechs and market infrastructure firms to improve collaboration and deliver the digital transformation of the industry. To make the changes that this industry needs now, and in the future, we’ll need to work together. 

That is why EquiLend has convened the Digital Transformation Working Group. It consists of many of the most influential finance firms globally and has already identified the most pressing issue facing our industry: inefficient trade reconciliations. 

Reconciliation is an antiquated way to solve incongruent data between counterparts, and the right way to solve this challenge is for there to be no incongruent data to begin with. As part of our work with the industry on digital transformation, we have launched our 1Source initiative, exploring the possibility of decentralized transaction data that will follow a trade throughout its entire lifecycle, eliminating the need for reconciliation altogether. This represents progress in how we are thinking about problem-solving as a collective, and I believe it can and will change the way data is shared, how counter-parties use data and, how the industry can work together to bring about better outcomes with greater transparency and accountability than ever before.  

EquiLend has been working to deliver a network effect in securities finance for decades and we have broad ambition to further our network into other areas: collateral, RegTech, repo, you name it. Right now, we are uniquely placed to go one step further and change the way the network operates, bringing every party closer and helping them work smarter together every day. This is a major opportunity for our clients, and in turn, our industry. By realizing the potential of the network effect, we can help our clients take the maximum possible value from every interaction and transaction and, in turn, reimagine an industry that is stronger and more collaborative than before.

Who We Are

EquiLend is a global financial technology, data and analytics firm offering Trading, Post-Trade, Data & Analytics, RegTech and Securities Finance Platform Solutions for the securities finance industry. EquiLend has offices in New York, New Jersey, Boston, Toronto, London, Dublin, India, Hong Kong and Tokyo and is regulated in jurisdictions around the globe.