Six years after the great dot-com bubble burst, online finance is electric. Internet technology and automation continue to transform virtually every corner of financial services, from retail banking to securities brokerage to portfolio management. More bills are paid, companies researched, risks hedged and stocks traded online today than ever.
For a telling example of technology’s power, look no further than the New York Stock Exchange, that 213-year-old bastion of clubby brick-and-mortar finance, which through a March merger with Archipelago Holdings aims to transform itself into an aggressive, highly automated, publicly owned company. For their efforts, NYSE chief executive John Thain and new co-president Gerald Putnam, formerly Archipelago’s CEO, move to the top of Institutional Investor’s annual ranking of the most influential people on wired Wall Street, the Online Finance 40.
Joining the NYSE in our seventh annual compilation are competitors including Liquidnet Holdings, an institutional block-trading network run by Seth Merrin (No. 13), and a host of exchanges that have embraced electronic trading and gone public in the past few years: archrival Nasdaq Stock Market (led by Robert Greifeld, No. 11) and derivatives bourses such as the Chicago Mercantile Exchange (Craig Donohue, No. 10), the IntercontinentalExchange (Jeffrey Sprecher, No. 29) and the International Securities Exchange (David Krell, No. 12).
Electronic trading also continues to grow in the fixed-income and credit derivatives markets. Volume on TradeWeb, the bond-trading subsidiary of Thomson Corp. that’s run by James Toffey (No. 15), by September had easily surpassed its total for all of 2004. Creditex CEO Sunil Hirani (No. 25) recently attracted a $60 million investment in the fast-growing derivatives platform from venture capital firm TA Associates.
Online brokerages, left for dead when the bubble burst, have come raging back and are now consolidating. Leading the wave are TD Ameritrade Holding Corp.'s Joe Moglia (No. 8) and E*Trade Financial Corp.'s Mitchell Caplan (No. 9).
Even if technology is king, CEOs who have relied on investment bankers Jane Wheeler (No. 27) and Steven McLaughlin (No. 34), or venture capital duo James Hale III and Robert Huret (No. 28), will tell you relationships matter in finding the right financing or strategic combination.
This year’s Online 40 shows that e-finance not only has recovered but is thriving. We can’t wait to witness what the next few years will bring.
The Online 40 profiles were compiled under the direction of Assistant Managing Editor Evan Cooper and written by Cooper, Senior Editor Justin Schack, Contributing Editor Ben Mattlin, and Contributors Frances Denmark, Tom Groenfeldt, Tom Johnson, Scott Martin and Gayle Ronan.
