9. Building Modular Exchanges via Partnerships and Outsourcing
In this chapter we explore the radical transformation in the structure of financial markets, from monolithic exchanges that served all functions to smaller components that can be snapped together like Lego blocks to quickly build new exchanges. We provide several in-depth case studies that illustrate how various players adapted their business models to electronic exchanges.
Before the shift to screens, exchanges were built to be self-sufficient entities that supported all the functions of the trade cycle. Each exchange had dedicated groups of employees supporting the numerous functions of the trade cycle. Each exchange had its own product development group to create ...