Why you should care
Because bond trading is belatedly joining the tech revolution.
Iseult “Izzy” Conlin made her first play on the stock market in 2005 with an investment in 1-800-PetMeds, a direct-to-consumer pet prescription business. Then just 17, Conlin was impressed with the company’s savvy approach to the real-world problem of access to animal health care. Essentially, it was Uber for pet meds, pre-Uber. “I thought that was genius,” she says. By 2017, she had a five-time return on her investment.
Conlin credits her early market acumen to her “nerdy love of math” — plus her mother’s insistence on financial literacy. Being one step ahead of the pack has been a hallmark of her career. Conlin, 32, has spent the past decade on Wall Street advocating for deeper integration of tech to modernize the corporate bond market.
Her work uniform consists of skinny jeans, Toms and Ray-Bans.
Over the past 30 years, much of Wall Street has shifted away from pen-and-paper trades to embrace digital dealings. But the $50 trillion bond market has been especially resistant to change — in part because purchasers buy through brokers, not public exchanges. The move to electronification — the industry buzzword for digital trades — is happening, whether people like it or not. A rising crop of fintech companies is democratizing access, from electronic bond trading platforms such as Tradeweb and MarketAxess to robo-adviser services like Betterment and Wealthfront, which automate portfolio management. They’re gaining market share: In fall 2018, 26 percent of corporate bond volumes were traded electronically, according to research company Greenwich Associates, up more than a third since the spring. Benefits include regulatory transparency, data-driven trades and centralized pricing. Forget the whisper network of the past. Today’s trader needs to go digital, or die.
“My day is focused on idea generation,” says Conlin, currently a U.S. institutional credit product manager at Tradeweb, which went public in April at a $7.5 billion valuation. “I look at it through a different lens.” At work, she wears many hats: strategy, product development and sales. As one of the few people on her team with real-world trading floor experience, she understands the tools brokers need. Conlin joined from BlackRock, the world’s largest asset management firm, where she says she “automated my workflow so much that I was no longer using my brain.” In seven years at BlackRock, she went from an investment-grade bond trader to vice president of trading and liquidity strategies, her specialty being fixed income and e-trading.
Raised by her lawyer mother, the Boston-born blonde was lured to New York by NYU, which recruited her for its college basketball team. Originally pre-med, she found she was more interested in economics, and being in the financial capital of the world exposed her to the intricacies of the markets. But from day one, she poked holes in a process that still saw bond trades mostly conducted via phone. “I was the iPhone generation,” she says. “I was surprised that things were still being done over the phone.” She immediately saw the disconnect between finance and the tech revolution happening elsewhere.
Initially, there was resistance — the “computers will take our jobs” bogeyman that’s infected all industries, coupled with a reluctance to learn new tricks. She didn’t want to be the know-it-all recent college grad, so she took a roundabout approach, implementing tech tools in her trades and telling her colleagues that she was saving three hours a day. Questions flooded in: How can I do what you’re doing? “The skill set of a trader has evolved,” she says. “Now they understand how technology aids their workflow.” BlackRock recognized the value she brought and developed a millennial trader-pairing scheme, matching new hires with old hands.
Conlin is part of the new guard of Wall Street, a millennial mogul in the making, challenging the status quo from the trading desk to the power suit: Her work uniform consists of skinny jeans, Toms and Ray-Bans. “It’s very rare that folks who are very smart and technical [can] relate to the whole team without ego,” says Chris Bruner, managing director and head of U.S. credit at Tradeweb, in reference to Conlin.
Today, much of the Wall Street trappings of yore have disbanded. In 2018, the New York Stock Exchange appointed a female president, the first in 226 years of business, and you’re as likely to connect to an artificial intelligence adviser as you are to a human. Some 35 percent of bond trades at asset management firm AllianceBernstein, for example, are handled by AI. But Conlin is still the exception. Women remain a minority on Wall Street, accounting for 19 percent of C-suite positions, according to a McKinsey report, and they’re less likely than men to be promoted at every stage. But Conlin doesn’t want to play the woman card. “My mom told me that no matter my gender, I can do anything,” she says. But she hopes her achievements (Forbes’ 30 Under 30 list; a top trader according to Markets Media’s Women in Finance) will help women and disenfranchised people realize there’s a space for them.
Forward-thinking goes hand in hand with innovation, and the sentiment is changing: A 2018 survey by J.P. Morgan found that 61 percent of fixed-income traders would use mobile trading apps, nearly double the number from 2017. The increase in electronification potentially benefits everyone; as more markets go online — the U.S. Treasury is increasingly digitally traded — it opens the door for emerging markets to gain a bigger foothold. But Christina Ku, a fintech investor at NTT Docomo Ventures, notes that the electronification of corporate bonds is a marathon, not a sprint, and that larger sales will often be handled by traditional over-the-counter traders. Still, she thinks we’re going in the right direction: Electronification makes bond pricing more transparent and easier to compare, especially for the average investor — more closely resembling the stock market.
That’s the better bond market Conlin is working toward. “It’s 2019 now,” she points out. This isn’t your grandfather’s Wall Street anymore.
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