Most traders don’t think about the vast network of intricacies and regulations that keep the financial markets going. Beacon is a technology company that helps asset managers streamline their risk compliance and operational platforms, allowing investors to focus on trades.
What Happened: Beacon co-founder Mark Higgins joined Benzinga Live to discuss how the company was making an impact in the quant space.
“We are a financial technology company and we sell mostly to capital markets companies,” Higgins said. “Fewer people that are looking at charts and more people who are either making markets or complicated products, it could be people on the sell side like banks or people on the buy side like asset managers.”
Watch the full interview here.
Beacon’s platform works because it’s not a “one-size fits all” type of product. The company will assess new clients’ businesses and see exactly in which ways it can help streamline operations and risk compliance. In this sense, Beacon acts almost as a consultant, coming into an outside company and revamping the company’s technology for more efficiency.
Beacon is already working with massive companies like Shell PLC SHEL and PIMCO.
“Often we are just one part of the big, complicated technology stack that these companies have. And so we sort of slot in to help people at the pointy edge of the stick, at the front office, the people that have to move quickly when the market’s moving. We give those people the tools they need to manage their business,” Higgins said.
Why It Matters: Beacon’s unique approach allows the company to be more flexible and helps companies with a wide range of solutions. One of these areas, risk compliance, has been a hot term in the public debate following FTX’s fallout.
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In particular, Beacon helps market makers and asset managers who trade derivatives manage their risk. This is a tough job, considering derivatives often carry more risk than traditional stocks and a large umbrella of what falls under derivatives.
The market opportunity is so large for the financial services industry that there is almost no point in even trying to quantify it, Higgins said. And financial companies are just spending more and more money on technology each year, which puts Beacon in a great position.
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