By Patrick Chambeau, Director of Marketing, IPC
Every day, several trillion dollars of securities are traded around the world, often executed in fast-moving volatile markets, as we have seen this week.
Between 2000 and 2013, the size of the debt markets grew from $33 trillion to over $90 trillion, and the U.S. treasury debt doubled from $4.5 trillion in 2007 to over $12 trillion in 2014. The daily global FX turnover is more than $5 trillion per day. We can identify a few key factors to explain this growth.
- An abundance of news and financial information – (Some call this “Infobesity”)
- Improvements in communications
- Marketplace structure – more trading venues, greater transparency
- Improvements in analysis techniques
- Greater understanding of risks
- Increased need for matching the requirements of market participants
Crucial to successful trades are fast and accurate communications across a banks’ front, back and middle offices, as well as the ability to capture trade data for regulatory purposes. Combine that with the need maintain 24/7 trading operations across multiple geographies and accommodate employees who increasingly work from offsite and remote locations, and the logistical complexity for sell-side firms has reached an all-time high.
One way to help solve the operational complexity is to establish a systematic and seamless workflow—one that captures voice, chat and email communications for archival and compliance reporting. Instead of multiple systems that don’t interact, are redundant and necessitate manual processes and record keeping, a single communication system that enables collaboration between front, back and middle offices could provide a cohesive and frictionless solution. A single system can also help achieve cost containment by eliminating legacy systems that were not originally built to archive information and deliver compliant reporting. If banks looked at their communication needs on the whole instead of as disparate tasks, operational performance and cost efficiencies would improve, and separate functions would no longer be siloed.
More so, a collaborative workflow solution would free resources currently focused on labor-intensive manual processes, thereby optimizing workforces and improving efficiency. In fact, entire enterprises could then focus on the business of trading, instead of on re-architecting processes. Beyond that, the notion of being completely connected offers the potential for issues to be raised and quickly solved, further increasing productivity.
With more professionals focused on mission-critical needs — such as enabling price discovery, best execution, alpha generation and liquidity sourcing — banks can provide better client experiences and will be better positioned to mitigate operational, market and investment process risks. Such maximized connectivity between functions, roles and clients is sure to foster an environment in which all market participants are free to trade across a range of devices, anytime and anywhere.
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© 2018 IPC Systems, Inc. All Rights Reserved. The contents of this publication are intended for general information purposes only and should not be construed as legal or regulatory advice.