What’s your goal?
Quickly and convincingly build the go-to non-profit open source foundation for financial markets. Significantly, we will seed this foundation with world-beating code contributions from known open-source heavyweights and founding partners, and fund a small world-class dev team that also produces and/or extends reference software in key areas of interest to financial markets, that is convincingly better than industry alternatives and helps us avoid re-building the same things, at a lower quality level, again and again. The goal of the team is to produce results in a reasonable period, that attracts both wide industry adoption, and contributions from the best open source community and the financial industry. Part of our charter will be to assist partners in putting in place great examples of open-source governance and participation, and to help our industry more productively engage with open source, and use it for better client value and competitive benefit.
Isn’t this doomed if you can’t get industry contributions? Financial markets employees cannot contribute to open source projects, since their employers own all IP they produce, at work or at home. Isn’t this true?
Yes this is true right now, and it is one of the biggest problems open source initiatives have faced in our industry. Our industry adopts a great deal of open-source software. It produces very little of same, which cause all sorts of problems, most importantly, it prevents the successful collaboration with the rest of the world that great open-source depends upon.
However, we plan to change that, at least enough to make this initiative successful. And no, we don’t need to change all employee contracts to make this possible. We can start with a simple carve out.
Isn’t this a little Marxist sounding for investment banks and hedge funds? Why would they allow contributions from their institutions and employees? What’s in it for banks and hedge funds?
This may sound like it depends on selflessness and altruism for success, but it has very useful selfish advantages for wise capitalists. Otherwise, Google, Apple, IBM, Microsoft, and the rest of the tech industry wouldn’t continually invest heavily in similar open-source initiatives. Same for the other industries following the same model. See our section, What’s in it for me?
How could banks and funds make sure that what gets contributed is something they’re happy about?
The two keys are: a strong open-source governance model, and an easy-to-explain policy. Our suggestion for our industry partners:
- get the right level of senior buy-in, both in technology and in the front office. Use our materials, and ask us for help.
- form an open-source governance group (all financial institutions form governance groups daily for programs and projects large and small)
- generate an easy to explain policy. we’ll supply you with a template.
- get buy-in from your legal department and HR department. ask us, and we’ll help.
- explain the policy to employees and management. we’re happy to advise on how to do that.
- work with us to create world-class software in our areas of focus, and adopt and use it to build increasingly good proprietary extensions, and integrations with other internal code and systems. in other words, use our code to your competitive advantage.
Why hasn’t this happened before now?
Various initiatives have tried. The great thing for us is that we’ve been having very helpful conversations with people who’ve been involved in all those we know about, and they are telling us what they think went wrong, and what they’d do if they tried again. It’s one of our biggest advantages. If you have experience with any open-source initiative in financial markets, please contact us – we need your learnings – it’s the only way we’ll get this right.
Won’t this open-source foundation be just be a puppet of the banks that contribute money to it?
To be successful, an open-source foundation needs a board of unimpeachable integrity, which is willing and able to tell contributors no when they sense suggestions are not in the interest of the foundation’s success. The board has to have a clear obligation to the success of the open source foundation, over and above any obligation to any contributor or industry partner. Clearly, to be successful, the foundation has to collaborate well with the financial industry. And donors will certainly lobby the foundation to focus on areas of interest to them – this model is well established in the tech industry. Senior financial industry executives we’ve spoken with seem to understand very well that they need to set up a foundation with an arms-length relationship to them, if they hope that foundation to succeed in the goals they hope it achieves – namely, producing world-class technology that they need and want, to solve use cases they constantly are having to solve and re-solve, often not that well.
Members of our founding group have run (at least one) successful for-profit bank consortium, and know the inevitable gaming that occurs when a shareholder board controls decisions. When it comes to productive collaboration, despite the best intentions of wise and talented board members, their institutional obligations and reporting lines often trump common sense, or the interests of the group. Fortunately, knowledge of this dynamic seems to be widely accepted in the financial industry at this point, as it has been accepted in tech and other industries already. Since we’re late to the open-source party, we have great examples of both success and failure from initiatives in other industries.