1. The equity derivatives product is new at Mizuho, having been launched mid last year. What are the advantages and challenges of starting such an operation from scratch?
The advantage is we have no legacy technology, so we are using the latest and greatest platforms available. Also, we have been able to recruit top talent interested in helping build an equities derivatives program from the ground up. Unlike those working on a platform that has been in place for many years, our team has been through the registration and development process from the beginning.
The challenge, which is an exciting one, is we are always in growth mode and that tends to stimulate ideas, which creates a lot of work to keep expanding and differentiating.
I like to say it is like adding a new story to a house every year. We have a great foundation from which to grow. Now we need, say, more amenities, more living space, and so on. Sticking with that analogy, the house is nice and getting nicer all the time, but the work is always ongoing.
2. Are there barriers to entry that make launching a new product difficult?
In financial services, it is fair to say that entering a mature market with a new offering usually comes with a steep climb for market share. That is why, when possible, it is good to have a running start. In our case, flow from our large retail operations in Japan is providing a nice tailwind and that momentum is helping us add new clients for the product.
3. Any changes in equity options trading you have noticed during the pandemic?
An influx of DIY traders armed with no-cost trading apps have become mainstream across most exchanges and in some “meme” stock names even the most dominant players. Post-pandemic, these day traders may not demonstrate the same level of overexcitement, but I do expect them to continue to be a permanent big factor.
4. How did you complete the project in a pandemic setting?
I remind myself every morning that the main ingredient to success is always the rest of team. In that regard, I have been extremely fortunate at Mizuho in having phenomenal professionals in FO, EQD-IT, Legal, Compliance, Middle Office, Settlements, Finance, Risk, Credit, Treasury, our COO and not to forget the tremendous support from our colleagues in Tokyo doing most of the heavy lifting.
In a way, we were well-positioned to move forward in a pandemic-era workflow in that we always had to coordinate working across teams and geographies. We had to communicate in lockstep before the shutdown, so while Pandemic protocols decentralized the team in the US, it didn’t change the communications culture we had established. So we didn’t miss a beat in keeping the project moving forward here and back in Tokyo.
5. Speaking of the pandemic, did you explore new hobbies or indulge more in favorite ones, as we had to shelter in place for months?
My family and I certainly reconnected a bit more. I have two young girls and the time was filled with more board games, shared TV watching, and meals together. While I look forward to us finally ending this terrible virus, I will miss the quality interaction with my wife and daughters as colleges and schools reopen for in-person teaching in the fall and we go back to our pre-pandemic schedules.