It’s been said that there is nothing like a crisis to focus the mind, and the financial services industry’s response to Covid-19 is the adage in action. With the initial emergence of the pandemic behind us, clients are taking a retrospective look at the crisis’ peak to assess the source of Covid-related challenges and determine how to address them.
There appears to be consensus among clients on both the buy side and the sell side that issues associated with the pandemic were not the result of the massive, 快速转向远程工作, 而是, the pressure of the market volatility that exposed weaknesses in their 帖子 trade systems. Record trade volumes brought record trade exceptions and settlement fails. 现在, clients must address the weaknesses that were exposed during the volume spike as a result of Covid-19 in order to ensure that should there be a second wave of the virus, 或者另一场危机, their systems are better placed to handle the subsequent increase in volumes created by market volatility.
These crisis-related operational concerns are further compounded by the need to ensure compliance with the forthcoming regulatory mandate, the 结算 Discipline Regime (SDR), a requirement of the Central Securities Depositories Regulation (CSDR) due for implementation in February 2021. 特别是, the SDR measures to prevent settlement failure – such as late settlement fines and potentially expensive buy-ins – will require market participants to increase the automation in their middle and back office functions. Post trade improvements which will help to mitigate settlement failure include enhancing the efficiency of allocation and confirmation processes and automating the processing of all settlement instructions in order to improve straight through processing and limit manual intervention. 最后, the automation of matching settlement instructions should take place in order to support fully automated, continuous real-time matching throughout the day.
The convergence of this regulatory requirement with the need to have ample operational efficiency and automation to handle further potential crises means that clients are carrying out a wholesale analysis of their 帖子 trade processes. The big question for clients is whether they respond to these needs via total digital transformation or whether they make small scale changes to legacy technology. Outsourcing 帖子 trade processes to market infrastructures such as 存 is another option which clients are considering as this route will enable them to achieve scale and efficiency while reducing their costs base through increased automation.
An investment in fully-automated 帖子 trade processes enables firms to track trades in real time throughout the transaction lifecycle and tackle challenges – such as exceptions – more swiftly via dedicated platforms that connect to other market participants and service providers to facilitate timely resolution. 快, accurate reconciliation is also supported by market and static data services that can enrich data fields and accelerate transaction flows, while analytics tools are improving the ability of firms to identify and resolve persistent sources of failure and delay.
While clients are currently dealing with the challenge of uncertainty, the power of hindsight when it comes to Covid-19 paves the way for implementation of discretionary initiatives such as a digital transformation of the middle and back office. Although the pandemic has also created resourcing issues, prioritising initiatives that automate and increase efficiency in 帖子 trade are further supported by the need to comply with the requirements of SDR, which is expected to go live in less than a year. 考虑到这些趋同因素, a strategic investment in the middle and back office to build a zero-touch environment can both reduce costs in the longer term and future-proof against potential crises, ultimately resulting in safer financial markets.
这篇文章是 出版 全球投资者.