Interview with Olga Orekhvo, Chief Operating Officer of CompatibL
CompatibL is a leading provider of custom software development services and trading and risk management software solutions. At a time when many companies are turning to the cloud as the foundation of their IT strategies, Chief Operating Officer Olga Orekhvo explains how the cloud is just one – albeit an extremely potent – shot in the company’s software solutions locker.
Thank you for gracing us with your time, Ms Orekhvo! To begin with, can you give us a few words on why you chose to pursue a career in IT?
Thank you for having me at the World Financial Review!
I had always felt drawn to and predisposed toward working with technology (hardware and software in general). From the very moment I unboxed my first Atari 8-bit personal computer and wrote my first code in BASIC, I knew that this passion was here to stay.
There is a long list of advantages to pursuing a career in IT, and I would emphasise three of them: a dynamic environment that promotes innovation and creativity; working in a team of smart, strategically oriented and talented people; and ample opportunities for professional and personal development.
Since its launch in 2003, CompatibL has become an industry leader and technology-oriented partner for many successful organisations today. What would you say have been the principal factors in the company’s success?
At a time of fierce global competition, proficient and devoted people have always been our moving force in gaining a competitive advantage in the industry. The vision and the leadership team headed by the company founder, Alexander Sokol, were instrumental in CompatibL’s success.
Being able to bring the most talented people with both programming and math backgrounds together is one of CompatibL’s core strengths. We pride ourselves on being a rare quant- and engineer-minded company. Our forte is our unrivalled ability to apply quantitative analysis and engineering know-how to problems in order to create efficient and scalable solutions. We were deliberate in building this culture and believe it sets us apart from the competition.
In very simple terms, what are the components of a software solution? Can such a system be assembled today from “off the shelf” components, or is it necessary to do bespoke development in each case?
We pride ourselves on being a rare quant- and engineer-minded company. Our forte is our unrivalled ability to apply quantitative analysis and engineering know-how to problems in order to create efficient and scalable solutions.
There are many different components of a software solution, but the most basic are: the database, the back end, the user interface (UI), and the business logic. The database is the heart of every software solution, providing the underlying structure for storing and managing your data. The back end can cover different things in each case, such as API design, database architecture, server configuration and deployment, etc. The UI is how users interact with the application. The business logic is where all of your data is managed and how it’s organised. Together, these parts provide a fully functional program that can solve a particular problem.
Think of it like a car. The UI is the steering wheel, brakes, and gears; it’s how you interact with the application. Business logic and data structures are like the engine, transmission, and chassis; they make sure everything runs like it should.
It’s possible to build such a system today, but bespoke development or at least some modifications or extensions to the already-built software will likely be necessary in many cases. It makes sense from a security perspective, but also from a functionality perspective. An off-the-shelf solution will get you an initial offering, but it won’t be tailored to your very specific needs.
There is a saying that goes, “Most quants can’t code, and most engineers can’t do math.” One look at your varied portfolio of services quickly debunks this theory. How important was it for the company to be the exception to this rule?
From day one, CompatibL’s most challenging thing was to become an exception to the “most quants can’t code, and most engineers can’t do math” rule, and to bring together people who can do both. We’ve hired and trained quants who know a lot about software engineering, and we’ve hired and trained software engineers who also have in-depth knowledge of math and quant models. Combining both quant and engineering expertise in one team is what helped us to get through this challenging episode, and it’s what still makes CompatibL so effective in developing software and services specific to the financial industry.
For 17 years and counting, CompatibL has remained independent and free of the pressures that come with venture capital and outside shareholders. What do you think have been the primary reasons for this autonomy?
Fundamentally, CompatibL is structured to dream very big. We have always faced uncertainty with a plan and considered any turbulence, which is a normal part of each company’s evolution, as a wide range of possibilities. Innovation is no longer a luxury, and to achieve progress, be better prepared, we incorporate the lessons we have learned into decision-making processes and challenge the status quo. Our resilience strategy helped CompatibL withstand several global crises, including the global financial crisis, which shaped the industry significantly. Clear goals and resilience – these are the vital ingredients of our autonomy.
Your company prides itself on building software models from the ground up and making sure that that they integrate seamlessly with other models. Could you give us a general overview of how it all works?
CompatibL makes seamless integration possible by using our flexible microservices architecture, which permits individual cloud deployments for each service. These microservices communicate via REST semantics and can be hosted in Docker and deployed on any cloud/cluster infrastructure supporting Docker or similar container technologies. Or they can be self-hosted on a dedicated server. This allows us to combine microservices written in Python, Java, C++, and C# within an integrated workflow, including user-implemented extension modules. Clients are able to add new microservices and have them executed as part of CompatibL’s software workflows.
We also implement the analytics and business logic using a set of open APIs called CompatibL Runtime, with open-source adapters available in Python, Java, and C#. This is why CompatibL’s software can easily run on a wide variety of cloud, storage, messaging, and in-memory cache technologies selected by the client, instead of forcing the client to adopt the set of technologies and software versions required by the vendor.
The unique feature of CompatibL Runtime is its ability to run the same code on a broad range of relational and NoSQL database types without deterioration in performance. Thanks to its unique architecture, CompatibL Risk can run on relational databases such as Postgres, document databases such as MongoDB and DocumentDB, wide table databases such as Cassandra, and key-value databases, such as Dynamo and HBase.
Can you describe your customers’ involvement in the process of developing services for them?
We’re constantly gathering feedback from our customers and listening to their ideas, wishes, and suggestions for improvement.
We take a human-centred approach to product research and design. We spend time with customers to understand the problems they face. We’re constantly gathering feedback from our customers and listening to their ideas, wishes, and suggestions for improvement. We want to create the product that’s just right for them, and we’ve learned that this means taking time to listen and understand their needs and concerns before we develop a product.
We really value the customer experience and offer 24/7 support. When starting a new project, having round-the-clock support is crucial to keeping our customers happy.
Most of our projects have ongoing requirements rather than being a one-off opportunity. Our agile software development delivery model offers agile project management specifically for that, which helps satisfy customers’ expectations and deliver a flawless product on time.
What are your clients’ typical reactions when you describe the approach to developing a software solution? Might they have concerns because they perceive the technology to be not yet mature enough or the process not sufficiently clear?
It’s not unusual for software developers to be asked about their approach to building a new feature or developing a new software solution, and you’ll typically hear one of two things: it’s like baking a cake or it’s like building a house. In the case of CompatibL, it’s more like building a megapolis, with layers and layers of levels built upon each other.
We normally see reactions that vary from very enthusiastic to rather reserved. The more cutting-edge the client is, the more enthusiastic they are about exploring modern agile ways of developing a software solution, such as extreme programming or feature-driven development. It’s also not uncommon for us to encounter concerns about whether we can deliver on time, whether we can deliver a reliable solution, and what guarantees we can provide if the outcome is not satisfactory.
Most of our clients understand the complexity of the technology and processes involved in creating a software application. They realise that we’re doing due diligence and taking all of the variables and unknowns into account to make sure we build a solution that truly meets their needs and solves their business problem. The steps we outline make the development process transparent and very easy to understand, and our business development team is always available to help our customers through any questions or concerns.
What do you think are the primary benefits that software solution services can offer in a post-pandemic setting?
The software solution services industry is heavily cloud-driven, from simple data storage to advanced automation and collaboration tools. Most companies today are using cloud technologies, whether they realise it or not. With the cloud being so obvious a choice for businesses today, it’s amazing to see that some companies have been so slow to react. But now that they realise the need for a proper IT infrastructure and a company-wide approach, they’re ready to start focusing on their technology assets.
Cloud-native solutions can take full advantage of cloud services’ “pay per use” billing model, which helps optimise the cost of variable application loads. Financial services firms run many compute-intensive processes as part of their end-of-day workflows as well as intra-day – for example, during portfolio optimisation or when executing a new trade. Using legacy architecture on-premises or in the cloud for variable loads results in ineffective resource use, as either the physical or virtualised instance cannot be ramped up or down seamlessly when the application is running, while the ability to ramp up or down a cloud-native service is readily available.
To unlock the full potential of the cloud, the software must be re-engineered around services and deployment pipelines. It must use modern cloud-native technologies, such as serverless computing, distributed NoSQL databases, and cloud object storage. Only by fully embracing cloud-native architecture, using services-based technologies and tools, and demanding the same of the firm’s vendors can a financial services firm realise the full benefits of the cloud.
Another benefit of the cloud is its high degree of redundancy, even when running in a single geographic region. Even-higher redundancy can be achieved by using a different geographic region as a hot standby. This leads to significant cost savings compared with deploying an on-premises application at a disaster recovery site.
In one of our case studies, by implementing serverless cloud-native technologies, we were able to reduce the infrastructure cost of CompatibL Risk Cloud deployment on AWS by an average of 62 per cent, and on Azure by an average of 72 per cent compared with deploying the same application in an on-premises data centre. This three-to-four-fold cost advantage was made possible by leveraging true serverless cloud-native technologies, rather than running the existing application on virtualised servers.
However, when faced with a complex project with tough deadlines and budget limitations, project leadership often takes the path of least resistance and simply transplants existing software architecture to the cloud by relying on the infrastructure-as-a-service (IaaS) offering of their cloud provider. This option results in migrating the application by merely creating its mirror image in the cloud, with each on-premises server migrated to its virtualised cloud counterpart. While this approach requires few changes in the software itself, in the long run it deprives organisations of the tremendous value and potential of cloud-native technologies.
CompatibL also works in the area of security and compliance, apart from its already rich archive of delivered technology-powered solutions. Can you tell us a little bit about this part of your work?
Security and compliance have always been important pillars of the financial sector. Today, we’re building on that foundation to meet the emerging need for cloud transformation. Our customers primarily focus on moving out of their data centres, but adopting the cloud is not just about technology transfer. There is a lot more to cloud transformation than the actual transfer of assets. CompatibL helps to identify and evaluate IT risks and develop custom security strategies to cover any gaps. Our team of experts is focused on advising financial organisations on security compliance, risk control, and governance. Whether it’s in the cloud, on the network, or at the endpoint, we offer our expertise to help safeguard and improve the existing security governance of our clients. This includes data privacy, third-party risk, and IT regulatory compliance following their specific business challenges, goals, and requirements.
Given that most of your projects reside in the cloud, how do you think the current hybrid and fast-paced work situation will affect the digital climate?
The cloud presents a lot of opportunities, but also a lot of challenges. We’re working to make sure our customers can easily realise their ideas with our risk cloud software and are able to work without limitations. In the cloud, you have freedom, which enables fast-paced work and eliminates the traditional boundaries of on-premises systems.
The advent of remote work during the pandemic has significantly reduced management’s resistance to having applications in the cloud rather than in-house. The most important change has not been technological but psychological, as, during the pandemic period of remote work, both management and the employees have grown comfortable with not having their systems hosted in their physical proximity.
Remote work is making steady inroads in the industry through more tolerant attitudes toward telecommuting on some days of the week, but its expansion has been slow. COVID-19 is having a tremendous impact by normalising remote work and, in a matter of months, has brought about transition that would otherwise take years or perhaps even decades. Without a doubt, this rapid shift accelerated the digital transformation and the adoption of new technologies for working remotely. The lasting impact long after the pandemic ends will be the ability of organisations to successfully manage a geographically distributed workforce with a reduced need for in-person contact, providing new opportunities for expansion and recruiting. And this can only be achieved by leveraging the cloud.
Other than being an invaluable tool in transition to remote work, the impact of the cloud on software development has been critical for adapting to rapidly changing market conditions during the pandemic. Faced with the need to make rapid changes to their software systems, financial institutions have seen first-hand how the cloud provides a faster and more effective way to rapidly evolve their software and IT infrastructure compared with the traditional on-premises model.
The business outlook on the security of cloud infrastructure compared with hosting sensitive data locally is also changing. With remote and new hybrid working models expected to be the norm for employees, on-premises-based access to data is now seen not as an advantage but as a liability.
Speaking of disruptors, cybersecurity continues to be one of the primary concerns and is an area of growing regulatory focus. How do you assure clients that this is not an issue?
Cybersecurity is one of our top priorities. When developing CompatibL Platform, we focused on four key principles to ensure that the platform withstood cyberthreats: privacy, security, resiliency, and agility. We introduced a list of policies and procedures to ensure effective cybersecurity based on a number of foundational elements, including a risk-based approach, a strong leadership programme, and a culture of respect for our clients’ security. We also have a dedicated internal cyber-team that utilises leading security technologies to protect our customer data, and we have formed strong partnerships with best-in-class providers in this space.
Cybersecurity is one of our top priorities. When developing CompatibL Platform, we focused on four key principles to ensure that the platform withstood cyberthreats: privacy, security, resiliency, and agility.
Security risks are often cited as the reason some firms have not transitioned to the cloud. Previously, financial services executives believed that just because a server is local and housed at a site owned by the company, it is more secure than the cloud. However, this is a false sense of security. A security breach will likely be not from someone breaking into a data centre and physically accessing the local server, but through a cyberattack. If you look at some of the most significant security incidents, most of them happened when an on-premises or data centre network was compromised through a cyberattack, rather than through a breach of physical security. In the modern world, you cannot operate while disconnected from the internet. No matter how good your internal network security is, just the fact that you are using a non-standard network already makes it less secure than the highly standardised networks of AWS, Azure, IBM, or any of the other major cloud providers. Like Azure access management provides a secure and compliant environment for controlling user access and can be integrated with other Azure services. It also includes features such as multi-factor authentication, single sign-on, and self-service password reset.
Cloud infrastructure providers have whole teams and divisions staffed by extremely competent people who work on cybersecurity. Over time, and especially during the pandemic-era remote work, banks have learned to trust their cloud providers with protecting their data and systems, and their trust has not been misplaced. Cloud providers can do things that an individual organisation cannot do without a massive budget, and they can be your trusted partner in securing your network from cyberattacks.
Among the many advantages of running cloud-native systems is enhanced cybersecurity. A cloud-native application reduces cybersecurity risks by using a standard set of cloud services and technologies, which presents less penetration risk than non-standard on-premises or hybrid networks.
Like many other sectors, information technology and financial services have traditionally been male-dominated arenas. How would you characterise the current situation in the industry in terms of progress towards achieving an equitable gender balance?
The reality is that male-dominated arenas are losing out to the competition and becoming outdated in many different professional contexts. Leading IT and financial services companies don’t want to create a disadvantage and strive to reap the benefits of gender diversity. However, while the industry has come a long way in becoming less male-dominated over the past 10 years, there is still room for improvement.
What do you see as the main challenges faced by women today embarking on careers in financial services? What advice would you give them?
No one has it easy at the beginning. It’s hard individually to resist the statistics that suggest an act of discrimination may target the members of a particular group whose productivity goes unobserved, and this group is perceived to have a lower average productivity or a different mindset. My advice is to be adaptive and agile, set objectives, and adjust as you move forward. Sometimes you need to twist, turn, make a small change, and carry on walking toward your ultimate goal.
What can we expect to see from CompatibL in the coming months?
Machine learning is rapidly becoming a must-have in financial trading and risk applications. At CompatibL, we’re at the forefront of this change. CompatibL is conducting cutting-edge research on machine learning models for portfolio valuation and risk management, and was the first vendor to bring a machine learning credit limit model into production. As part of the next release of our platform planned for Q1 of 2022, we plan to release a full suite of machine learning models for valuation and risk across all asset classes.
Executive Profile
Olga Orekhvo has joined CompatibL in 2014 and serves as Chief Operating Officer. She is responsible for overseeing day-to-day company operations and contracting matters. Also, Olga manages compliance department at CompatibL, ensuring full compliance with laws, regulatory requirements, policies, and procedures.
