There is no doubt that the market for CTRM and related software is hot this year. Almost all vendors report significant activity and signings in almost all geographies and commodities. Agiboo’s Jan van den Brom says that he hasn’t seen this level of demand since he entered the commodities business back in 2000 and he believes that it is down to the volatility, a backlog created by the COVID lockdowns and, in ags & softs anyway, less choice for buyers. “It’s difficult to find a system that is both mature enough to have a broad range of functionality and yet is based on a modern technology stack and available in the cloud,” he told me.
Mr. van den Brom’s observations seem reasonable to us as we see what can only be described as the perfect storm of issues driving demand for CTRM software. However, in the ags & softs space, it does seem that buyer choice of a business viable and cloud-based platform is very limited. Many well-known platforms are aging and based on legacy technologies and, while there are some new entrants, these are very early and lack the functional footprint many buyers’ desires. This does seem to be something unique to ags and softs as in both energy and metals, we do see what we believe to be an increase in choice.
The demand has meant that Agiboo has signed five new names in the last month alone ranging from smaller entities all the way through to global businesses. Agiboo stepped up its staffing prior to the summer and Jan is very pleased that it did although he says most staff are still working very hard to cope with the demand. In addition, he says implementations are down to around 3 months these days and that helps nonetheless, Agiboo still has a waiting list for implementation.
Jan also thinks that he sees in shift in drivers from a risk management focus to one of increasing automation. “It’s not that risk is any less important,” he said. “It is more that firms are looking to streamline and integrate their trading operations and desire to enter a trade once and drive it through to invoice and finance without retyping anything.” This would make things like programmable workflow a very appealing feature of CTRM solutions. He points to staff shortages, rising costs and a need to optimize trading activities and make them more scalable as being behind this change in demand drivers for CTRM. Again, this also reduces the buyer’s choice as many legacy platforms will lack the workflow and approvals and other features needed to support restructuring trading operations.