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ZINNOV PODCAST   |   Business Resilience

Engineering an Innovation Stack for Finance

Prabhuram Duraiswami & Sunil Cutinho
Prabhuram Duraiswami Global Head of Referential Services and India Head CME Group
Sunil Cutinho Chief Information Officer CME Group

How does a 170-year-old derivatives marketplace keep pace with changing customer needs and rapidly evolving technologies? Join host Pari Natarajan, CEO, Zinnov, as he talks to Sunil Cutinho, CIO, CME Group and Prabhuram Duraiswami (PD), India Center Head, CME Group – the leaders spearheading the company’s cutting-edge engineering efforts.

Hear first-hand how CME Group has built a 700+ member strong global technology workforce, with India playing a crucial role. PD and Sunil pull back the curtain on attracting top talent, promoting a culture of continuous learning, and fostering grassroots innovation through hackathons and ideation challenges. They also discuss how they are leveraging strategic partnerships to harness the power of Generative AI, Cloud, and advanced data analytics.

Whether you’re in Fintech, an established firm undergoing disruption, or simply fascinated by the future of finance – get invaluable insights on building globally distributed teams, upskilling talent, and driving digital transformation in a regulated, high-stakes industry.


Timestamps

00:00Intro
01:29Upcoming tech trends in the finance sector
03:14AI's role in CME's digital transformation strategy
06:38How CME's India GCC enables 24/7 operations
11:56How the India center helped turn CME Group into a global firm
14:14What is CME Group's data and analytics strategy?
15:41Retaining talent in India, and building a culture of collaboration
20:33How CME Group is managing high customer demands, with talent strategy

PODCAST TRANSCRIPT

Pari: Welcome everyone to the new episode of the Business Resilience Series of the Zinnov Podcast. I’m your host for your session, Pari Natarajan, the CEO of Zinnov. Today, we are thrilled to be speaking with two trailblazing leaders shaping the future of finance. Prabhuram Duraiswami, the visionary executive director of CME, and Sunil Cutinho, the Innovative chief Information officer driving CME’s technology revolution.
Sunil has been instrumental in driving product engineering and technology advancement for the CME, a leading global marketplace for derivatives and risk management products. Prabhuram Duraiswami, or PD, the Executive Director at CME Group, he oversees the group’s Global Technology Center in India, which serves as a hub for software development, data, and analytics.

Pari: What are some of the macro trends that is currently disrupting the finance sector? And what are some of those trends going to play a big role in the next five to 10 years? I know that’s a long term.

Sunil: I’ll start with some macro trends affecting the world, specifically India. India is one of the fastest growing economies in the world. Wealth creation is at an unprecedented level and this new generation of wealthy customers – their needs are very different from the past.
They are technically savvy. They want ease of access to services. They want instantaneous insights. So those are the things we see driving the world in general, and that’s one of the reasons we got into a partnership with Google. Our goal is to make it easy for customers to consume our services.

The second goal is to derive insights very fast using our rich data sets. And the third is to reduce the cost of innovation. Typically, product creation costs millions of dollars and takes a long time. But we want to reduce it to thousands of dollars. The goal is to respond to clients very fast and involve them in designing the solution.

This is what this new generation of entrepreneurs and wealthy individuals desires from banking and financial services.

Pari: And, if you look at the customer you serve, you serve from hedge funds, institutional investors, commodity traders, retail investors, and digital transformation and AI is playing a big role.

I was at Google Next last week. Every single session started and stopped with AI. Yeah. How are you driving this digital transformation strategy for your customers?

Sunil: What’s interesting is that artificial intelligence as a discipline is not new to financial services. It’s been around a long time because we are a data-intensive business. Our clients use data to identify profit opportunities and manage investment risks. So data has always played a significant role, evolving with technology.

What’s new with AI is the generative aspect – the invention of transformers. It has made interacting with machines easier and automated things that used to take a long time. So in many ways, it’s shrinking time to value. That’s how we see this current generation of AI innovation.

However, the financial sector has very high stakes. The rave about generative AI is around human-like interaction capabilities. But that’s only good if the stakes are low. A wrong answer in financial services could be costly – we are regulated businesses where reputation is at risk.

So the industry would not jump headfirst into generative AI. Instead, we’d focus on technologies like retrieval, augmented generation using industry or firm-specific contexts to aid faster search. That’s how we see AI being applied.

Another area is coding and development services. Engineers spend a lot of time writing initial code – the basic environment setup. Generative AI can assist by quickly building that foundational shell. This allows our effort to be invested in actually servicing the client.

Pari: Interesting. On the client facing side, you might be a bit slower compared to other industries, but on the development side, you are really accelerating that. Very interesting. And you started the discussion talking about India being one of the faster growing market. PD, CME has had a India operations for a while. A very niche GCC focused on high end technology. Tell us a little bit about the evolution and what are we trying to achieve from the GCC?

PD: Oh, sure. CME started globalizing its technology staff about 12 years ago. We looked for a second location to support 24/7 operations and chose Belfast, Northern Ireland in 2011. We successfully built out that center.

Four years later, we came to India with around 100 positions, split between running technology operations, hiring high-end engineering talent, and leveraging India’s math talent as quantitative engineers for our Clearinghouse.

Fast forward to today, we have close to 700 staff in India across technology, global operations, and the clearing house business, working together to deliver value. Our journey has been similar to other global capability centers initially focused on talent acquisition and building trust with headquarters. But a key difference is the emphasis on educating employees about our business.

Sunil frequently visits India to explain why we build certain products/services, who our customer base is, and how to think about our complex market structures. This starts from onboarding, where we spend significant time teaching new hires about our markets, customers and business alongside their technical skills.

It extends to our early talent program at universities, where we run trading challenges to give students exposure to trading in our markets even before they join as interns or employees. We make it a point for them to deeply understand our business to deliver maximum value.

Pari: Very interesting. So you’re almost teaching them to be a consumer before they come and join as employees.

Sunil: Exactly. What an important point. Because then you start to appreciate, you know, how our clients use our services. CME prides itself on being the global center for risk management, and that requires round-the- clock availability. That’s where India steps up.

Our long trading hours, strategically positioned between Asia, Europe, and North America, make us perfectly suited to support clients across the globe. We’re the first stop in the trading day for Asia, handling operational and analytical needs for the region. It’s a key role, and our fastest-growing region reflects that.

Pari: All right. So even though you are a largely an US based company, your customers are now truly become global. And that’s a big difference.

Sunil: We operate in 150 countries, and we are growing fastest outside the US.

Pari: And one of the things PD mentioned, Sunil, you go to, you’ve already been to India twice this year. I’m pretty sure you have a very busy schedule being CIO of such a large company. Why do you go that often? And we don’t see other CIOs spending that much time at the GCC. It should be something important that you’re spending a good amount of time there.

Sunil: India has an amazing talent fold. Some of the brightest engineers in the world are graduating from Indian universities.
You know, we like to start early with our engineers. They, we can mentor them into becoming quants. We can mentor them into becoming a strong engineer. We can mentor them into becoming strong business analysts and product leaders. That’s our goal. So I spend a lot of time because it is important to treat the India center on an equal footing with our other offices.

So no different than the other offices. Because what we noticed is most organizations, they use the word captive. There is a sense that the India center is only there to do what is less interesting, very painful, low cost challenges. So, I mean, challenges at a lower cost. And we like to take a very different approach.

We’d like to use India as a team that will solve problems in specific domains. And PD can talk about what we’ve done recently in terms of rebalancing our engineering team, because India, we use India as a competency center for many of our key critical services. And we use UK as a competency center for a different set of services.
And then we have North America. So we used to be a very Chicago centric firm, we used to be very North America centric firm. But since 2015, we have evolved into a global firm.

Pari: So one of the questions I had is around the transformation of financial services companies, right? Financial services companies are not just financial services companies, but becoming more data and analytics companies. How is the transformation happening in CME?

Sunil: So our goal right now is to give clients the fastest way to derive insight from data. So that’s the idea. And AI plays a significant role in that.

But that’s easy to say. The harder part is consolidating data on a single modern data platform that makes data easily accessible for internal and external consumers to build insights. And then finally, allow our clients to actually integrate their algorithms directly to a beta platform, rather than having to collect data, clean it, curate it. To put it in numbers, to make, you know, 80% of the time is spent collecting data and cleaning 20% and deriving insights.

We want to invert that equation. 80% insights, 20% correct data. And our goal is to bring that down as much as possible. So that’s the focus of digital transformation for us. In addition to ease of access and global distribution.

Pari: And if you look at the data platform AI story, every customer offers, right? Be it in retail, um, large tech companies, local unicorns in India who are building these capabilities. And you’ve been around for like 150 plus years. How do you attract the highest quality of talent would want to come and work for CME in a hot location like in Bangalore where your operations are?

PD: So I’ll talk a little bit about how we have built the teams in India over the course of time. If I look at the skill set and the talent in the, in the office, they are spread across different products and services. We’ve got the people that work on the markets product. We have people who work on clearing, risk and post trade services. We built our India team brick by brick, overcoming initial challenges by prioritizing a great work environment.

Bangalore’s talent pool is fierce, but we focused on work-life balance and offering employees impactful work. This people-first approach transformed our India office into a critical hub. Today, it boasts expertise across product development, clearing, and data services. We empower our Indian teams to tackle complex challenges and take ownership, and they consistently deliver. Our referential data services team today is 75% India-based, with many team leads included. They exemplify this success. We’re laser-focused on making it easier for customers to do business with us, and our Indian team is at the forefront of this innovation.

Pari: It’s interesting because your domain is one of the more complex domains, things like options, trading and so on. It’s so you’re not just hiring engineers who can come and write Python code, but you’re taking the effort to educate them, make them understand these complex domains so that they’re able to add value and which requires some level you’re, you’re committing to be with them for a longer time and that shows that the leadership has stayed with you much longer time. On top of that, you have. The cultural aspect you have continued to work on. I’m pretty sure some aspects from India is reversing back in a culture of CME overall.

Sunil: Yes. Yes. It’s playing a big role. You know, each one of our locations contribute something and we share. We have a two day event, we call it Exchangetech, it’s a conference led by women in technology. It’s run, you know, near-simultaneously from three locations. It’s led from India, Belfast and North America and everybody can participate. So, and I love working with this team and they bring their ideas to the table and there is teams just borrowing from each other. So it leads to an amazing, strong global culture itself.

Pari: And one other point I want to talk about is your customers. You probably have some of the most sophisticated customers. If you think about just in New York City, the number of high frequency trading firms, and even to work in these firms, it probably requires the top of the class in the top of the Ivy League schools.
They’re trying to squeeze the maximum out of whatever the current technology possible being the best in class chips from NVIDIA and so on. How do you keep up with such customers?

Sunil: You know, we like the, we like to live in this world where the expectations out of us are high. High expectations from our customers are a good thing. They push us to constantly improve, iterate, and innovate. We collaborate closely with clients throughout the development process to ensure we’re meeting their needs in areas like latency, risk management, and data insights. This drive to improve extends to our technology partnerships. Our work with Google is pushing the boundaries of cloud computing, specifically in low latency and consistency.

When it comes to talent, CME offers a unique value proposition. We don’t focus on the goals of a single client or department, but on the bigger picture of the entire market. This broad vantage point is attractive to engineers, quants, and financial analysts who crave a challenging and stimulating environment. At CME, there are no walls – people can learn and grow across different disciplines. My own career path exemplifies this – I’ve moved from tech operations to clearing to technology, and back again. CME is a place for continuous learning and growth for those who seek it.

Pari: Sure, it’s almost like in our scenario, right? We work with a company like you, but our consultants can work across industries and different types of problems. So you have a very similar view from your customer.

PD: And if I may add, For India, specifically, the timing of us going to India, while one may say it was later than we should have, the good thing is all the banks were already there, right?

A lot of the talent was already built in India. We were beneficiaries of other banks being ahead of us and building the talent where we were able to go and attract them to work on more complex problems. Or if you have worked at a bank and you want to work on the risk management side of CME, you have an opportunity. So we were fortunate in that sense that us being late was not a bad thing at all.

Pari: So that really helped. So you had the critical mass of talent built by the Indian tech services industry, as well as the large banks who had come in. And with things moving so fast and one, you are reacting to what the customer needs are. You talked about hackathons, what are some of the examples of innovations that are coming out of the hackathons, which has had a meaningful impact to customers?

PD: Oh, for sure. I think innovation is probably a very overused word, but the way we think about this is in every day in your day job, you have a lot of complex problems to solve. At CME, innovation isn’t just a buzzword, it’s embedded in our daily work. We tackle complex challenges head-on, and our India team is a prime example. Our hackathons address real-world problems, like those encountered during our migration to Google Cloud. The winning solutions are implemented, not just celebrated. We also focus on employee engagement. Our “Women in Technology” program empowers female employees through mentorship and exposure to industry leaders. Pathfinders, a new initiative, brings together high-potential employees from across the business to solve strategic challenges. This program is sponsored by our top leadership, showcasing our commitment to fostering innovation at all levels.

Pari: Yes, it’s great. Amazing to see how you build such a cutting edge team in India. You look at some of our banking customers. Some of them have Yeah. 30, 000 people, very, very large teams and they’re able to do across, but have a team of 700 that really working with global customers and driving technology innovation.

I think that’s commendable. The story has to be told more. I think we’re starting with this podcast, but we should have more of those, for engineers to know what could be possible from a center in India.

Sunil: Of course. Thank you. Thank you for having us, Pari. It was fantastic.

Pari: I really appreciate it. Absolutely. Thanks for both of you to be part of this podcast. Thank you for tuning into this episode. We’ll be back soon with another leader, another exciting topic. Till then, stay curious. Thank you.

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