Future Proofing Post-Trade Operations
Opting for managed services for non revenue-generating activities and implementing scalable cloud computing power will be key differentiators in terms of financial services firms’ ability to compete in the digital age, according to a white paper published today by Celent, a global research, advisory, and consulting firm, and Torstone Technology, a leading provider of post-trade securities and derivatives processing.
The white paper cites an urgent need to devote resource to modernising post-trade systems which are often defined by legacy technology and siloed operations that require significant manual intervention, making it a critical source of inefficiency and operational risk. As revenue streams are challenged by an uncertain geopolitical landscape and growing competition, post-trade operations are coming under scrutiny for reducing costs, boosting margins, and improving return on equity.
The Celent paper, which features extensive research based on interviews with leading industry practitioners, provides key observations which can serve as a roadmap for firms looking to bring inefficient operations to the modern digital age:
- Firms are increasingly moving away from big bang transformation projects to a componentized and modular approach. Cloud-based solutions have become the preferred choice due to the cloud’s ability to address operational challenges in a flexible and agile manner.
- Automation across asset classes has significantly improved. As more asset class trading electronifies and adopts electronic trading platforms in the front office, they will need to be complemented by automated workflows in the post-trade arena.
- Cloud technology, API’s and microservices are the most popular choices to replace manual processes, while also helping improve data management and workflows, and manage communication and electronic messaging aspects in post-trade.
- Advanced analytics and robotics solutions are gaining ground in post-trade driven by the advancement of digitalisation, data solutions, as well as cost-efficient computing resources.
- Post-trade is a prime target for SaaS and outsourcing as firms increasingly move away from managing operations in-house that are not a competitive differentiator, with a growing preference for managed services solutions.
Commenting on the research findings, Brian Collings, CEO, Torstone, said: “Continued industry and regulatory change in the marketplace is putting significant pressures on financial firms. The ongoing need to reduce costs, achieve greater control, minimise risk, ensure compliance, and drive operational efficiency has seen an increasing number of market participants partnering with technology firms that can provide highly automated, scalable and flexible solutions. The Celent white paper certainly serves to highlight that growing trend.”
According to Arin Ray, Senior Analyst, Celent and author of the paper: “Improving automation levels in post-trade will require modernizing back office systems with new technology based on latest standards and frameworks, and simplifying the complex patchwork of systems accrued over the years. New technology such as cloud, process automation, and engagement models such as managed services will be important levers for improving efficiency in the next phase of this journey.”
Source: Torstone Technology
Institutional investors are increasingly considering opportunities in the digital asset class.
The consolidated quote system for corporate bonds has raised funds to expand outside the US.
SEC's proposed rule could result in dissemination of incomplete, inaccurate and misleading data.
SEC requires a review of data on non-listed securities before initiating or resuming quotes.
Broker-dealers will be able to meet the new SEC requirements.