Ep. 216: Robert Cooke - Streamlining Data Management: An Inside Look at Fintech Solutions

March 06, 2023 | 23 Minutes

Today we're excited to have Robert Cooke, the founder and Principal Architect of 3Forge, a New York-based fintech company that focuses on solving complex data problems in the accounting world. Robert joins Count Me In to share his story about his lifelong passion for computers and his journey to founding 3Forge. He breaks down the three buckets of data that the company focuses on: real-time streaming of data, asking computers about data, and data entry. Robert emphasizes the importance of having the right technology in place to analyze data properly and shares his experience working with various organizations to solve their data problems. Join us as we explore the fascinating world of fintech and data.

Episode Transcript:
Adam:            Welcome to Count Me In. The podcast, where we examine all things affecting the accounting and finance world. I'm Adam Larson, and I'm excited to introduce our speaker today, Robert Cooke. Robert is the founder and principal architect at 3Forge, a New York-based provider of data visualization and visualization technology. Today, Robert and I discuss his passion on the interrelationship between computers, people, and data. And describes the future trends he expects to see in data management. 
Businesses of all sizes can gain value through using data to optimize and streamline their business. And we discuss how the technology chosen plays a role in driving a competitive advantage. Let's listen in to learn more.
Well, Robert, I want to thank you so much for coming on the podcast today. We're really excited to talk about you and your organization, and fintech. And before we go there, I just wanted to start with maybe you could tell a little bit about your story and how you got to where you are?
Robert:           Okay, yes, great, Adam, thanks for having me on today. So my story is I'm a lover of all things computers. I've been into computers my whole life, ever since when I was a little kid. I went through the natural learning curve, which is, originally, I wanted to build video games, and this is in the early '80s. So I was focusing on what does it mean to write efficient code and things along those lines. And then later on, we had this club, and in the club people could buy sodas and buy candy bars, and things like that and it was like a Boy Scouts equivalent. But it was all being paper-driven in terms of the accounting and everything. And I felt, "Well, this is a great opportunity for computers."
And that's when I realized, wow, computers, as a kid, I always saw video games, and I realized these really are business machines, they can really help streamline things. And, so, our little club was actually, probably, one of the first grade school clubs to, actually, be managed through electric accounting. 
Now, I'm embarrassed by the system I built at the time it was very hardcoded for sodas and candy bars, but it still got me started on the concept. So I've really spent my whole life thinking about, abstractly, what it means to connect humans to data. And that can take you in a lot of places. 
And then I ended up working in fintech, it was Bear Stearns, it was in 2002. And I was head of infrastructure at the dark pool Liquidnet. My work product has been at many of the tier-one banks, but all the while it's been this, I would say my story has been one of interest in computers and interested in how humans and data interact.
Adam:            And that's a huge part of, especially, in the accounting world. Where you have to understand where your data is and what your data is doing. To be able to visualize it properly, to give the right reports to your CEO and all of those items. And, so, we all understand how important data is. What does your organization, what does 3Forge do in terms of data? How do they look at data?
Robert:           Well, I look at data, I've actually broken the problem down into three buckets. I think two of which are very important for accounting. But to be exhaustive, I'll go through all three of them. The first bucket is what I would call real-time streaming of data. And that is not necessarily as important for this conversation, but it is something that we focus on as well. So the idea is, as data is taking place somewhere you want to be able to have that streaming in, and as a human be able to read that in real-time. 
An example I could give is, if you think of, at this point, cars are pretty advanced. That dashboard in your car, that's real-time streaming information coming to you, telling you your speed limit. You don't have to ask the car, "What's my speed limit?" It's just always showing it to you, that's real-time. I think very cool things could be done in accounting with that, as you start to move into workflows, but I'll digress on that. 
The second thing is what I would call asking your computer about data. And, so, a very simple analogy would be you simply go on to Google and you type in, "Who is Adam Larson?" And then it comes up and gives you an answer. That would be you, a human, invoking a question, asking the computer and the computer comes back, that's the second thing. 
And then the third thing is data entry, which is pretty much what it sounds like. The ability to fill out a form, hit Submit and send that. And then that goes into the computer. Maybe it goes through some validity, maybe it goes through some workflow process, with the ability to enter data. So, to recap, we break it into three buckets– 
  1. Data moving in real-time.
  2. The ability to ask questions about data.
  3. And the ability to enter data. 
And I think one of the cool things is, and this is like decades to come up with this answer. It almost seems embarrassing because it seems so simple, at the end of the day. But once you've thought about it in those three buckets, you can really start to tackle just about any problem that comes your way. And, frankly, accounting has some of the most deceptively, challenging problems there is. 
I mean, some of the systems that I've seen built on our platform are way beyond my understanding, to be quite frank. You know what I mean? But there's a lot that goes into it.
Adam:            Yes, there is a lot that goes into it. So that just goes to show it's really important to have the right technology in place, at your organization. To make sure that you can analyze your data properly. What have you seen as you've worked with many organizations. As they come to you with different problems and having to work through their data issues?
Robert:           Well, it's interesting because it goes without saying that Excel is the predominant piece of software being used. And Excel, I'm sure if I look, I've got five monitors here, I'm sure if I look around enough I'll find Excel up on one of them for something. 
And, I think, Excel is an incredibly powerful tool for certain activities, especially, if you're trying to mock things up quickly. You're trying to aggregate some data, maybe determine interest rates, something like that it's very good for that. 
But I do think it has a tendency to be overused, to the point of abused, and I think a lot of people would agree. But at the same time, at least, there hasn't been a good alternative. And that's something we focused on, is providing that alternative. A few of the places where Excel starts to break down is, and they're making headway in this slowly, but it's being able to prevent fat-finger events. It's very easy to accidentally update data that you shouldn't be updating. 
Also, it's hard to keep a good audit trail of who's done what, and there really isn't much around workflows. So let's say you and I work in an organization. You can enter data into a system, but that data doesn't actually get reflected until I, as your manager, in this scenario, would approve that. And, so, something along those lines. So the workflow aspect is another thing missing. 
But with that said, I think, Excel is definitely a very powerful tool, and it's used in a lot of cases. I think there's also a countless number of vendor solutions that solve a particular problem, within any space that you can choose, accounting certainly being one of them. And then you've got, as you get to the larger organizations, a lot of our customers are tier-one banks, 100,000 employees plus organizations. They'll often roll their own software. 
And, so, what 3Forge is trying to fill the gap is to provide a generic platform. And I would say Excel is a data-agnostic, generic platform. You can do just about anything you want in it. So we have provided a data-agnostic platform, but with a focus on trying to fill in those gaps around being able to audit changes to the calculations. Being able to put workflows around data entry. Making it a little bit easier to build reports. And I think another thing is, and this gets a bit technical, but having a separation between data, calculations, and display those three pieces. And, so, that's what we focused on.
Adam:            Well, and that's a huge part where things can go wrong, in Excel, is where you're trying to put calculations in the same spot where you have all the data listed. And you can maybe accidentally delete something, you can do all those things. So having those blocks in place, sounds like a really great solution to some of the biggest problems that you see with Excel.
Robert:           Yes, and it's interesting because these problems, a lot of these problems were solved in the '80s. And they made their ways into databases and I could talk a lot. I mean I love the history of the database, and where it's gone, and the sort of things it's done. But it's been really, I would say, centered around the developer mentality not the business-user mentality. 
And, so, we've just taken a lot of the things we learned from the database discipline and tried to raise that up, so that it can be a little bit more digestible by business users. By people that are actually used to using something like Excel. So, for example, I could go on all day, but one thing that databases do very well is what you would call data integrity. So, you can't put apple pie into a price column, it just won't let you. It won't let you type that in. So it's just, "No, it's got to be a price." In fact, if you can even say it's got to be a price with this many digits of accuracy, and it has to be within this range. 
So if you could set up those things, it's actually pretty tough to do in Excel. Excel makes it very flexible. But it's not hard for one to imagine that you could add those sorts of features. You know what I mean? You can add those features to say, "Okay, this column of data must have this validity to it." You know what I mean? And if it doesn't, then just don't let them enter it or force them to do something else, et cetera. 
So that's just one of many examples. But really it's been about, I think, a lot of our journey has been trying to bridge that gap. Between the sophisticated solutions that developers have at their disposal, learned through databases, and being able to move that up the value chain so that business users have access to that as they-
Adam:            Yes, that makes a lot of sense. Because what we've been seeing in the accounting space is that a lot of accountants are learning about data science. Because they recognize the importance of having the validity of the data and being able to analyze it from that way. But are there ways for people to understand and analyze the data without being the data scientist?
Robert:           Yes, first off, well, if we specifically talk about our platform, I could give general answers. But with our platform, how we've tackled that is through personas. 
Adam:            Okay.
Robert:           So the idea is you have, I guess, what you could call the database manager, we call it the Admin persona. And those are really the people that can actually go in and do very physical things with the data. They can actually change the validity around what it means to be a price, as an example, data integrity type things. And then you've got another persona, which is people that want to be able to build dashboards. And usually they're subject matter experts. 
So they understand that; "If I take price times quantity, well, that's going to give me value." Something like that, I mean, that's a trivial example. But the idea that they are subject matter experts, and they understand how the data operates, and how it interacts, and what data from this sheet multiplied by data in this sheet, what that's going to look like.
And then the last persona I would say would be the consumer. And now we're a little bit more into either people that are just looking for end-of-day reports, or want to be able to fill out a questionnaire, and then get answers around that. What was our P & L over the last quarter? And they don't, necessarily, need to understand all the inner workings under there. 
So a lot of this is tackled through this persona concept, which, again, this isn't something that we invented. It's just we're trying to make it a little bit more accessible to the financial world.
Adam:            Yes, so do you have any examples, maybe that you can share, of organizations that have been successful? Obviously, you don't have to use names of the organizations. But of organizations that have been successful using software like yours, as you've observed it?
Robert:           Yes, absolutely, I mean, we've definitely had cases where organizations, especially, when they're dealing with money and everything has to be 100% accurate. 
I was surprised to learn this, but a lot of times they would have to actually tackle it, because you can never be sure, "Is the Excel, the integrity of all that data correct?"
They would actually do things in duplicate and then see if everything netted out. And when it didn't, then they could work backwards. And by doing it twice, having two individuals do it, now, they knew that integrity was there. Then, the issue they start to face, over time, though, is as the assets under management grows, so does the complexity of trying to calculate what the carry interest is going to look like. This is just one example. 
And, so, as the assets grow and grow this becomes, exponentially, more difficult, I'm imagining, I can't say for certain. But to me, it seems as though as you have more moving pieces and you calculate, predict it all, it just goes up and up, kind of, exponentially. And, so, it actually got to a point, and I've seen this at multiple firms, where the amount of time it takes to actually do the calculations, and to provide reports back of investor positions and things like that, exceeds what can be done in a month. And then as it grows, it can't be done in a quarter. And then, all of a sudden, you're now to a yearly result. 
And, at this point, our customers, they really look at that and say they have three choices. They either just tell everyone, "Look, we can only produce this yearly."
Or they say, "We're going to find some vendor product that happens." And they can use Excel in that, first example, they use Excel and they do it yearly. 
Second example is they conform to an existing vendor product that has a certain solution. But that means that basically the vendor is now driving the business, as opposed to the business driving the business. You know what I mean? It has to conform to how the vendor designed the software. 
And then the third option is using our approach. And I say our approach because I could see, over time, other people building products like ours. But, for now, it's our platform. So they could basically say, "Okay, I'm going to adopt this data-agnostic solution. I'm going to put my business logic in and then we can now produce these reports."
And, so, we've been able to help our customers keep their very customized, I would call, intellectual property, that gives them a competitive edge. They've been able to keep all that. All those things that we're leaving, that were all domiciled in Excel, they've now been able to put that into our platform. But now they have all the rigors and checks that they would get from a bespoke vendor solution, or by hiring a team of people and building something from scratch, in a database.
Adam:            So would you say that it's been successful? Have you been successful at this, as time has gone on? I see that 3Forge has been around since around 2010. How is that process gone along over the years?
Robert:           Well, the crazy thing is we attacked this opposite almost every other software vendor. I mean, we really went after the hardest to-use cases there were. 
I think today we estimated that about one in five equity orders around the world are somehow analyzed through our software, across our clients. So when it comes to the large, recognized banks, we're being used in those. 
And, so, we're talking about replacing gobs of Excel reports and it's not a technical term. But just huge volumes of what was being done in Excel have been replaced. So we've seen success, for sure, at the large tier-one banks. 
It's recently in the last, I would say 24 months, that now that has started to trickle over to the buy-side. And, so, yes, we've definitely seen success at several buy-side firms as well.
Adam:            So as you think about the future, as we're coming to the end of the conversation. When you look at the future and the future of technology, and how the industries are going. Where do you see organizations going as far as looking at their data?
Robert:           well, I think there's a lot to be said there. First off, every organization, and I've thought about this. I blurted this out on one podcast I did a while ago, and then I thought about it retrospectively, and the more I think about it, the more I agree. There is no business that cannot gain substantial value through the data they already or should own, that they're producing. I thought about it, even if you're a small car dealership, or if you are a cleaning service, there's probably data that can help you optimize and streamline your business. 
Going all the way back to my candy bars and soda back when I was a kid. So I think that, and it's definitely happening with our larger customers. They've now acknowledged that what was considered to be a cost is now an asset. At one point, I was like, "Oh, we have to store seven years of data because the SEC is requiring us to do this." And I was like, "There's overhead in this cost."
And they've, actually, that's shifted on the balance sheet to an asset. So that information that's sitting there is critical. The problem is when it's sitting, and I know I keep picking on Excel, but I could pick on lots of systems. The problem is when all of that data is sitting in siloed, broken up areas and you can't look at it holistically, it's very hard to extract value, certainly, maximum value from that data. And I know I'm going on a little bit of tangent here. But one example, we had a customer who they literally had an Excel file for every single account that they were managing. So if they had 400 accounts they had 400 Excel files. 
To be able to actually take that data, which is something we do very well. To take our system and lay that on top of these Excel files. Something I haven't talked too much about but we have the ability to take our platform and have it sit on top of Excel files. So you can ask questions across your entire Excel plant, if you want to call it that. 
And suddenly they could realize there were certain accounts that were sitting there very domiciled, not doing anything. There were other accounts that had a lion's share of the investment, and it became very easy to ask these questions across this data. So, I think, one of the things is that organizations are going to understand that they need to start to consolidate that data, to get more value out of it. 
A data warehouse is one approach. I don't actually think it's necessarily the best approach, especially for large organizations, but I do think that is a big part of the future. Another thing, another trend that I see is that as systems grow and companies grow, systems tend towards complexity, they have to. 
People are always adding new features; they're not really taking away features. People are adding new laws to a contract. They're not removing elements from a contract. You know what I mean? Generally speaking, and, so, as things get more and more complex, I think there needs to be more rigor around how data is managed. And I know that's a lot to chew, what I just said there. 
But as systems are getting more and more complex, there needs to be processes in place that manage the flow and accountability of that data. And I think organizations that do that better, and in fact, one of our customer is all over the place. They just have their whole motto is "Stability first." You know what I mean?
Adam:            Yes.
Robert:           And by the way, they're probably one of the top companies, one of the largest companies in the world. And the more I thought about that, well, isn't that, kind of a boring mantra? "Stability first." But you know what? At the end of the day, it's having that stability, and having the security, and the awareness of the complexity that I think really gives people a competitive advantage.
Adam:            It really does. And the other thing I was thinking about, maybe you can comment on this, what about small to medium-sized businesses? Because you've mentioned a lot of the big-time businesses. But small to medium-sized businesses are a large portion of IMA members, and they're tapping into technology more and more because the world is online right now. And, so, what about those people who are trying to get into data now?
Robert:           Mh-hmm, yes, well, it's definitely worth stepping back and saying, as a small business, what is your intellectual- IP? And, by the way, I founded 3Forge in 2010,11, 2011. And, so, I know what it's like to be a small startup. And you have to make, pretty much all your decisions have to be close to correct, you know what I mean? And you have to be willing to pivot, et cetera, as you need to. 
So I look at it as, for small companies, it's important to have focus on what it is that is your intellectual - IP. And be able to take that and use the correct technology for it. And I do believe that through technology, using the right technology, you can get a large competitive advantage. And if you're using the same technology as your competitors, of course, you can be smarter than your competitors, that's why you can win. You can have some edge or some insight that your competitors don't. But, ultimately, as we go down this path more and more, the technology that customers choose, that small businesses choose, is going to have a bigger impact. 
And, by the way, I will say that small companies have a huge advantage in that they can be much more nimble and they can make decisions a lot faster. The ability for a large organization to switch from one platform to another can easily be a large initiative. 
I'm not even talking about 3Forge, at this point, just generally speaking, switching from one platform to another. 18-month initiative, 24-month initiative, a team of 50 developers, da, da, da, these huge things. But small companies take advantage of the fact that you can move quickly.
Adam:            Definitely, that's a huge point to remember, is that you can be more nimble when you are smaller. And being able to do that is a huge advantage, especially, as the world becomes smaller because of how vast technology is growing, basically.
Robert:           Mh-hmm, agreed.
Adam:            Well, Robert, thank you so much for coming on the podcast today. I really appreciate you coming on and sharing your knowledge and expertise with us.
Robert:           Yes, absolutely. Thanks for having me on.
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