Trading Made Easy With Beans Technology Date:   Thursday , October 01, 2009 Financial institutions, that trade, face an uphill task to find risk in their trading activities, particularly when they do so in a derivatives or other complicated transaction environment. This is because of the complexity of such transactions and various kinds of risks that emanate from trading positions. A tool, that can give real-time pricing, risk analysis and pre-trade processing, can help broad treasury participants including but not limited to banks, insurance companies, fund houses, derivative traders, brokers etc.; it can help them to maximize their profits by giving accurate numbers for such trading activities. Beans & Intellect Financial Technology is a company that is building technology components for niche treasury markets. The company is a provider of analytic, technology & consulting solutions focused on BFSI, fund management and broad capital markets. Founded in January 2006, company’s mandate include providing solutions in credit risk, market risk and compliance areas across front, middle and back office treasury functions. The company has developed a unique pre-trade derivatives processing product, called WebTrade, to un-risk the process of derivative trading. It is an ASP based online platform that can be accessed from anywhere by keying in a simple login / password on a web browser. The platform spans the entire spectrum of derivatives life-cycle - real-time pricing, structuring, risk management and portfolio management with real-time market data. WebTrade covers a wide range of derivative products, from liquid vanillas to highly illiquid OTC structured products, across various asset classes. “It is powered by a highly optimized, efficient mathematical engine built using proprietary Beans++ language with built-in models and methodologies required for valuation of any complex structured derivative products on a fly,” says Anshumaan, the Founding Director of Beans & Intellect. Entrepreneurship the IIT Way Being an alumnus of IIT-Bombay, Anshumaan feels that the institution has played a crucial role in making him an entrepreneur. The unique exposure provided by the IIT’s is one of the key elements that helped him realize his dream of being an entrepreneur in the financial markets. During his undergraduate years in IIT-Bombay, he got the opportunity to do an internship at Outsource Partners International in New York. He understood various aspects of finance & accounts outsourcing during this time and also started to explore opportunities in financial markets. During his stay in U.S., Anshumaan was exposed to the financial sector particularly, then thriving investment banks, brokers, traders, exchanges, financial instruments and broad OTC trading contracts. “One of my trips to NYSE, at an age of 20 years, remained etched in my mind for a long time,” he adds. It was also during the same time that he realized that there are opportunities even for technocrats in the financial markets. Apart from the international exposure that was possible at IIT, Anshumaan feels that the institution gives enough space and opportunity to its students to take up courses in fields they are interested in and also gives them the freedom to work in the same after graduation. In order to pick perspectives, he picked courses in risk management, financial management and derivatives at the School of Management (SOM) in IIT-Bombay during the final years of the undergraduate studies. Anshumaan was exposed to financial engineering –mathematics applied with technology in financial markets – by one of his professors during the same time. After graduating with his dual degree at IIT, he joined Globeop Financial Services, a hedge fund accounting firm in Derivatives Technology Accounting Group. After working for a year or so, Anshumaan started to look out for something more exciting. There were two ways in front of him – one, find another interesting job and two, venture out with an idea. His entrepreneurial inclination re-surfaced (He headed corporate relations team of The Entrepreneurship Cell of IIT Bombay) when he decided to start his own venture. He was pre-incubated at Society for Innovation and Entrepreneurship (SINE), IIT Bombay. S. Dhilly Babu, one of his batch-mates, also joined him in this journey at SINE. S. Dhilly Babu quit his job in CRISIL where he was working in the Risk & Investment Advisory Group. In SINE, both Anshumaan and Babu worked on prototypes and did research on the financial markets, technologies relevant for the broad treasury space, available products and services, pain points of financial institutions etc. for over a year. Finally, all these efforts paid off when they co-founded Beans & Intellect in January 2007. Building Blocks of the Company There were some challenges that were faced by the duo, while building the company. “One of the challenges that we faced was finding the right team. This meant finding a group of technocrats who would be able to build technologies for the financial markets and also understand the mathematics behind it,” says Anshumaan. While the prototypes were built, the company faced the challenge of knowing the pain points of potential customers. On top of it, being a cross asset solutions company, Beans India had to cater to different segments like foreign exchange market, equities, commodities, fixed income markets etc. broadening the business mandate. “To develop comprehensive solution that covers all major asset classes and also solves the problem of our customers was a challenge that the company faced in its early stage”, says Anshumaan. After overcoming typical challenges of an early stage young venture, Beans India, today, boasts of many large financial institutions as customers. WebTrade, the online product of Beans India, can be accessed by customers once they get a user license provided by the company. The customers have to pay for the license on per user, per year basis, apart from an annual maintenance cost. Apart from the WebTrade platform, the company also provides analytics, technology and consulting services to financial institutions. Reuters has partnered with Beans & Intellect in the Asia Pacific region to augment their capabilities in building and implementing their treasury products. “In order to reach out to a large financial institution, we had to connect with a large treasury system provider or such functional technology intermediary. Therefore our early association with Reuters was in the right direction.” says Anshumaan. The company worked with Reuters to implement structured derivative product for major banks in Asia. It also implemented solutions for treasuries and based in India and Middle East. Going forward, the company will also be working with some of the other major financial institutions in India and S.E. Asia. By integrating sophisticated mathematics, high performance computing and cutting-edge technology in their solutions, Anshumaan feels that Beans & Intellect has brought knowledge innovation in the market. Having technology and analytics background mixed with the domain knowledge of treasury markets, he believes, is a unique value proposition for the aforesaid markets. Beans & Intellect is the winner of corporate silver award at Lakshya among large companies such as L&T, YBL etc. It has also been picked up as the top 30 emerging technology companies in India for innovation by the Department of Science & Technology (DST) & Lockheed Martin - India Innovation Growth Program (2009). “I envisage, Beans & Intellect, to be a Knowledge Company emanating from the Indian soil and challenging the likes of Numerix, Scicomp, SuperDerivatives, RiskMetrics etc. We work at the intersection of high-end treasury business, cutting-edge technologies and sophisticated mathematical modeling targeted to solve an array of very critical and high-impact financial problems making us one of the most unique companies in Asia, Middle East, Australia and Europe. ”, Anshumaan concludes. Though, there are players in the market like UK-based SuperDerivatives and News Wire 18, part of the Network 18 Group that offer the same kind of offerings like the WebTrade platform, Anshumaan believes that their product is mathematically more rigorous than existing products. “We spend a lot of time in research,” he says. We take research oriented approach for solving a problems and this is also one of the factors that differentiates us from others in the market, he adds. Currently, Beans & Intellect has an 18 member team, who are based in the company’s two offices in Mumbai. The company is also planning to start an office in Singapore to handle sales in S.E. Asian region. The company is funded by private investors and few venture capitalists, senior bankers, industry veterans are on its advisory board. The company has been growing consistently in the past 2 years and recovered the initial investment in 2008. Though, the economic slowdown inflicted a severe damage to the balance sheets of many firms, Anshumaan feels that the growth trajectory of Beans & Intellect will be unaltered. “From 2007-08 to 2008-09, our growth rate was 650 percent and we expect the growth to be similar or better in this financial year compared to the last,” he adds. Going forward, the company wants to spread its wings across the globe. “Middle East is one of the main markets that we are looking at, we are looking at around 15-20 financial institutions in that region as our potential customers,” says Anshumaan. The company is also targeting the South East Asian market at this time with a registered entity in Singapore. They are also actively engaging in discussions with consultants based in Europe and U.S. to understand the demand dynamics for their services. They foresee a presence in the U.S. and European markets as well in few years. With the right mix of technology, mathematics and domain knowledge, Beans & Intellect is an ideal choice for treasuries that are reeling under the pressure of finding Indian vendors that can provide them high-end solutions and value for their money, both simultaneously !