How tech startups will become major competitors to HFT trading

It used to be relatively easy for the financial industry to attract the smartest people in the workforce. High salaries, big bonusses and the aura of succes when you'd be working for a major investment bank on Wall Street or the City. Prop trading firms were the first companies to offer more than just a desk and a big paycheck to keep the traders happy. In-house chair massages, play rooms with a bar and football tables, luxurious company outings, design offices, name it and they had it. The mantra was, work hard, play harder.

Tech companies took a page from that playbook, combining a good environment to work in, then work your butt off and reap the benefits from a sky high valuation of the stocks everyone was given. 

The financial industry has rapidly lost its appeal. The outside world identifies the industry with greed, and overpayed risk takers gambling away money and screwing the economy. It will take years (if ever) before the image of the industry will be restored. Tight regulation also does not add to the appeal as it curbs opportunities.

So, the best and the brightest are increasingly looking for opportunities outside the industry and for those with a quant background, Silicon Valley is the way to go. 

Quants, the people that lifted this industry from a gut instinct trading community to a data mining technology driven trading bot are now more popular than ever in Silicon Valley. After all, it is all about data science and optimizing the data. Wheter it be Google, Uber, Amazon, or Goldman, it is all about making sense of the data that drives business.

Working in 'Silicon Valley' is the new sexy. Hard work, long hours, fun offices, chair masages, and huge financial opportunities much like working for an HFT firm. But, witout the negative stigma. And, if trading does not pan out, the experience in working for a tech company can easily be applied anywhere else in the Valley.

In this article, the author signals this trend and foresees that tech companies will not just be the drain of good work force but also become the major competitor to the the industry as they will have the technology, the data and now also the knowledge.