Nex Group’s Knott untangles banks’ trade challenges

Post-trade business reorganises with a focus on cost-cutting and simplification

Jenny Knott Nex
Jenny Knott: “I wanted to do something where I could have some fun, and grow again and create something transformative”

Over the course of 30 years in financial markets, constant change has remained Jenny Knott’s loyal companion. Moving banks, roles and countries multiple times, she has borne witness to an ever-evolving industry.

“All that career rotation, working in different functions – finance, operations, risk, legal, technology – has led me very naturally to where I am now,” she says.

Knott heads Nex Optimisation – the business unit built around what was the post-trade services division of Icap prior to the sale of its global broking business to rival Tullett Prebon. It offers services aimed at reducing the costs, risk and capital use of banks and buy-side firms.

With the derivatives industry split between a growing universe of cleared and standardised products and a fragmented over-the-counter market segment in steady decline, Nex is betting on banks and buy-side firms having an ever greater need of its core trade management services: credit checking, margin and capital management, and trade reporting.

“I chose to join Nex and leave the banking sector because we can solve collective industry problems better outside of the bank itself. We can’t solve our problems in a silo anymore,” she says. “We actually need to solve the industry’s problems. We’re trying to solve the challenges the industry faces as a whole, such as compression, matching, optimisation.”

The technology at her fingertips – including Infinity, the cloud-based platform Nex unveiled recently – is a far cry from the early days of her career; Knott recalls using Lotus 1-2-3, a forerunner to Excel, to calculate the present value of the first interest rate swap the Swiss Bank Corporation (SBC) traded in 1986.

Consolidating London, France, Germany, Switzerland, Spain, Greece was horrendous
Jenny Knott, Nex

The regulatory environment that underpins the derivatives markets has also changed beyond recognition in that time. When she started at SBC, every country the bank covered had its own regulatory, accounting and capital frameworks, she recalls – the first of the Basel Accords was signed in 1988 – as well as its own currency.

“Consolidating London, France, Germany, Switzerland, Spain, Greece was horrendous. Everything we were doing to unite [our businesses in] Europe was a bid to simplify all of that complexity. Things like Basel – which unify all of that – people take for granted now; they have no appreciation of how complex that world was,” she says.

Even with a number of senior job titles under her belt, Knott adheres to the philosophy of lifelong learning. Growing up in a large Irish family and attending a state-run school in south London – Crown Woods Comprehensive, also the alma mater of former Standard Chartered chief executive Peter Sands – were both, she says, invaluable preparation for navigating the personalities encountered in investment banking.

Senior experience

The years spent working in senior roles in a wide variety of banks – SBC, Nomura and latterly Standard Bank – have left their mark, too: “The Japanese, the Swiss and the South Africans are extremely client-orientated; they truly believe that if their clients are unhappy, their business won’t exist,” she says.

She left Standard Bank in 2015: “I wanted to do something where I could have some fun, and grow again and create something transformative.” Knott says she was offered a variety of roles, many with other banks, but a meeting with Michael Spencer, Icap chief executive, led to a swiftly accepted offer to join the ranks. “There were some interesting roles out there, but Michael’s by far was the most exciting,” she says.

Her current role – harnessing a disparate group of trade and portfolio management businesses to build a more powerful offering under the Nex Optimisation banner – is one of her most challenging to date. Lots of the firm’s individual business units were acquired as bolt-on acquisitions, with many of the founder chief executives staying on and joining the ranks of Nex’s senior management. Rather than imposing a top-down way of doing things, Knott’s approach has been to encourage the cross-pollination of ideas by holding regular offsites and open-forum meetings. It’s a management style more familiar at a tech start-up than a long-established financial services firm.

Knott’s belief in collaborative effort, combined with diverse experience of a range of cultural fits and constant desire to eliminate unnecessary processes, has helped inform Nex’s latest project. Post a corporate reorganisation this week, the firm unveiled Nex Infinity – a cloud-based solution designed to create a single point of access to all of the group’s trade lifecycle management services.

The platform should benefit users looking to use, for example, the firm’s pre-trade credit-checking services, as well as its post-trade reporting offering, without having to engage in any manual processes in between. The firm is targeting July for client testing of a new foreign exchange and cash equities matching, allocations and confirmations service, powered by distributed ledger.

Biography: Jenny Knott

2015–present Nex Group

2007–2015 Standard Bank

1998–2007 Nomura

1992–1998 UBS

1989–1992 Paine Webber

1986–1989 Swiss Bank Corporation

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