Financial & Professional Services
Avox Data Services may be the most important financial business service you’ve never heard of. It helps brokers, dealers and investment managers comply with key financial regulations from its offices based in Wrexham, North Wales.
Paul Barlow was employee number 43 when he joined Avox in October 2006. Today, the COO of the data services firm and site lead for the Depository Trust and Clearing Corporation (DTCC) is one of 550 that work in the Wrexham operation. Avox is responsible for checking and verifying the information that is held by banks and other financial firms on their customers. The firm’s huge growth spurt was sparked by increased regulatory scrutiny of big banks being ramped up since the credit crunch of 2008. Avox now performs a critical function. “In 2014, US and European financial regulators dished out fines and penalties worth a staggering $65bn,” Barlow explains.
These penalties were for numerous regulatory breaches, including headline grabbing ones such as the Libor rate-rigging scandal. But most were for far more mundane things, like banks not holding valid and accurate client data. Avox has seen its client base grow as banks have been forced to invest more in scrutinising the integrity of their client data.
“Data spend went from the bottom of discretionary spend for banks to top of their non-discretionary spend,” Barlow says. “We have more than 50 global banks as clients. We validate their client data, which helps them to satisfy their regulatory reporting obligations.”
Avox was founded in 2003 by Steve French and Ken Price, who specialised in risk management software. They saw a gap in the market to ‘fix’ banks’ data.
Deutsche Börse, the German stock exchange, spotted the potential for the business and in 2005 it bought a majority stake in Avox. By 2010, it was clear that a harsher regulatory climate for financial groups was here to stay. In July that year, DTCC snapped up the business.
DTCC has more than 4,000 employees across its operations and is headquartered in the US. It is owned by 315 banks and stock exchanges and was set up in 1973 to solve the paper crisis on Wall Street by automating the back office processes to execute and clear financial transactions. The group now handles 100m transactions every day.
Since the giant group took control of Avox in 2010, its Wrexham base has grown from 140 employees to 550. “Initially there was a big question mark on whether to put significant investment into Wrexham as the locale doesn’t have a reputation in financial services,” he concedes. “But we’ve taken people on without financial services experience and given them that. The initial question marks from the States have disappeared. They are now our biggest advocates in terms of staff and our talent.”
A large part of the success of Avox’s charm offensive was down to the strong relationship it has with Coleg Cambria, the local further education college in the North Wales town. It was also keen to emphasise Wrexham’s proximity to cities like Manchester and Liverpool.
“Having Manchester Airport less than an hour away is brilliant. That was a big thing when we were selling Wrexham to people in New York,” Barlow says. Ninety per cent of the financial firm’s staff come from the local area, supplemented by some key hires from the likes of Barclays, RBS, Citigroup and MBNA, based in nearby Chester. The business has also received support from the Welsh Government.
“We funded staff education through Coleg Cambria with Welsh Government aid,” Barlow says. “We’ve had a lot of support. We’ve also had funding through the European Economic Growth Fund.” And the business continues to grow.