Bond Trading Has Never Been Easier: Cicada Technologies

Q: Why build a solution around fixed income and why does Mexico need this solution?

A: While global fixed-income trading has finally and fully entered the digital era after the pandemic, in emerging markets it remains an old-school affair with all transactions still being negotiated in phone conversations or messaging systems, just like equities were in the 1980s. Our mission at Cicada is to bring it in line with global markets by finally providing a digital solution to institutions that will create an efficient and fair secondary market that anyone can access. The fixed-income market in Mexico is known to be rigged with anti-competitive and abusive practices, we want to change this through technology.

Q: How does Cicada Technologies use intuitive design to add value to its financial solutions? 

A: A digital solution that simplifies the complexity of bonds offers high added value. Cicada Technologies understands how traders from both the sell-side (banks) and the buy-side (institutional investors) work and generates processes that facilitate trading.

Q: What is your expansion strategy within Mexico?

A: The first product we are launching is our institutional trading platform, as we noticed a need for innovative platforms at an institutional level. The platform’s final goal is to create digital liquidity and automation tools for fixed-income trading. Following our recent investment round, we expect to position this platform at an institutional level during the next few months. The second part of our strategy will be to provide liquidity to institutions that have their own retail customers. This infrastructure will allow any person to finally be able to buy government bonds directly in their brokerage or bank accounts.

Q: Why implement a trading solution at a time when Mexico is seeing one of its highest inflationary periods in history?

A: As a platform, volatility can potentially benefit us because it leads to more trading volume, and better access to fixed income instruments allows investors to protect their money against inflation by putting it to work in different markets, like the Udibono market.  People need to balance their investment strategies and our solution broadens their options. At a global and institutional level, bonds are attractive because they are safe investments. 

When there is inflation, having money in cash leads it to lose value. During inflationary times, investing in certain inflation-linked bonds is the only game in town.  

Q: What plans does Cicada Technologies have for Mexico?

A: Our main goal is to grow the platform's penetration among institutions and reach a critical mass of trading volume. We want to show financial institutions that there is greater value to be created from electronic trading rather than simply sticking to old habits. Second, we want to deploy our solution that will allow institutions to give access to these instruments to their retail customers.

Our long-term goal is to modernize and democratize the Mexican bond market and expand to other emerging markets with similar idiosyncrasies. 

Cicada Technologies, founded in 2021, seeks to bring fixed-income trading to the 21st century.