Host: Behind every multi-billion dollar trade on Wall Street lies a maze of legacy paperwork, stalled onboarding, and costly back-office bottlenecks. In a fast-paced market driven by faster T+1 settlement rules, slow operations no longer just cause delays. They can burn capital, trigger penalties, and risk costly failed trades. While using patented AI, Sapphire powers instant onboarding and real-time trade settlement for global banks as well as custodians. Joining us live here at the New York Stock Exchange are co-founders of Sapphire, Chief Executive Officer Gabino Rocher, as well as President Stephen Rocher. Well, gentlemen, great to have you here. Thank you so much for joining us. I want to start with you. So tell us what Sapphire actually does.
Gabino Rocher: So basically, there's a tsunami of work that happens before the trade, and people don't realize it. They just see all the action back in the '90s on the trading floor. You've got all these different disparate parties, and I think Steve, right, we've talked about that asset manager. They have, when they launch a new fund, they got to open that process with every single broker-dealer, custodian, and that process 10 years ago, before we existed, used to take anywhere from six weeks to 18 months. And in that process, the methods they used were email, faxes, and spreadsheets. I mean, faxes, right? So our technology platform can help condense that onboarding period where you can be ready to trade on something like Epic spots tomorrow, so 24 hours. And we don't stop there. We remember that information, and we expose it in what's called the post-trade to help expedite settlement processes. Hence the motto for our company, which is trade first, settle faster.
Host: Yeah, and we're here on the floor of the New York Stock Exchange, and there's so much data that's actually streaming all around us. So tell us about some of the risks of failing to modernize old systems.
Stephen Rocher: The risks that we see for the last 10 years, again, is like the re-asking of information, the repetitiveness of it. Like when you launch this new fund, for example, the KYC team, the legal team, the credit risk team, the tax team, they're asking the same data and documents multiple times, and the client is slow to start trading on that new fund. So the client experience is not optimal, and the firms that help adopt new technologies to help give that seamless experience can help the first market movers to garner more business by giving a better client experience.
Host: And of course, while we're here, we have to talk about artificial intelligence. So tell us about the role of artificial intelligence and what software does.
Gabino Rocher: So, tons of bells ringing in here, but the point here is there's not a lack of data, there's a lack of agreement on the data. And you can apply AI, but if you don't have trusted data, you just make mistakes faster, OK? The beauty about what we're doing at Sapphire, we've had 10 years of experience on this, of building a data normalization platform. So Steven talked about several of those parties, custodians, broker-dealers, asset managers. They have different nomenclature. You normalize that between the firms, and you can have a bank institute AI internally and get productivity. But if you actually put that in that layer of normalized data externally between firms, then you transform the market. That's where we want to get to because the AI can give you productivity internally, but normalized data with AI gets you speed to market and revenue faster.
Host: And of course, we're talking about technology and infrastructure here. So when we're talking about the long-term vision for Sapphire, tell us about what you're working on and your competitive advantage.
Gabino Rocher: So one, I, I, people don't realize we have like 108 patents on our patented technology, and that existed before AI because what we were trying to solve, again, is this exchange of information between firms. Because when trades fail, believe it or not, most people think of the economic details of a trade, right? You're charging a $5 commission versus a $3 commission. Those problems have gone away for the most part. The real problems exist, for example, when your tax form in India expired and you cannot trade on the Indian rupee, you cannot fund your trade to convert it from Indian rupees to US dollars. That has actually revenue impacts upon your business. That is all upstream. So when you work from the point of inception, onboarding new accounts, and you actually create a way of remembering that information, that's where you get speed to market. And the AI helps us now ingest this information when you don't have standard protocols like email. You have people actually passing email back and forth. This is something we can actually ingest, and AI is just merely using the rules that Sapphire has already established to standardize that and normalize that information.
Stephen Rocher: There's a false sense of confidence with AI. They're going to get wrong answers faster, right? So the issue is you're going to France, you're speaking French and using alphabets, and you're going to Japan, you're speaking Japanese using characters. You need kind of a Rosetta Stone to help translate things, and not one financial institution does the same nomenclature and language as another. And that's the key thing here, that we've done the unsexy work for the last 10 years to map the private data and documents on there so that they can have data integrity and AI can make the right decisions accurately, faster.
Host: Yes, and I understand that you have many TradFi clients that are utilizing Sapphire, but right now there are concerns about agentic AI, especially in a highly regulated space. So what would you say to people out there who are concerned right now?
Gabino Rocher: Well, for one, I think the Bank of England did a survey just this year, earlier this year, where 86% of financial institutions are using AI, but only 2% of them are actually giving it broad autonomy. So there isn't actually that trust. And the point here that we're making is AI will get eventually more proactive, but today it should be used for the narrow gaps. I talked about email as a great example, but you can't just have it broadly interpret email. You have to have a rule set that understands how to normalize that data because a lot of the stuff that happens in finance behind the scenes between the folks in this room is not documented on a website. It's just understood verbally. And the other thing I would say is there's a real impact on revenue. So you have sell-side brokers making quotes, RFQs, right, requests for quotes to their businesses, and they're losing business because, for example, information is trapped in a legal document like an ISDA, a GMR, or whatnot, if you're familiar with those derivatives tradings. And if you can normalize that not just within your firm but have agreement externally with your clients, you'll be able to win more trade flow faster.
Host: And gentlemen, we have about 60 seconds here. So what's the five-year vision for Sapphire?
Stephen Rocher: I would say that a lot of these middle-office operations, back-office operations would be a thing of the past. Very boring. No one would even understand what we just went through. It's kind of like when I talk to my daughter about the rotary phone, she doesn't even know what that is, and she had to look at it. But yeah, the important thing is the data structure to provide AI to have the decision capacity reliably on anything moving forward. And again, back to my daughter, she comes home, says the number 67. I'm like, what the heck is that? And it's a cultural reference, and that's the thing you have to curate with AI. And I think the world is going to be an exciting place in trading in the near future.
Gabino Rocher: The last point I'll make is Wall Street has done great in executing the trade fast. Sapphire is doing all the other stuff outside of the trade and making it just as intelligent and fast.
Host: Well, Gabino, Steven, great to have you on the show. Thank you so much for joining us, and thank you so much for sharing the story of Sapphire with us.
Gabino Rocher and Stephen Rocher: Thank you.
