Robin Kneale argues that as trading across multiple asset classes increases, operating in silos is no longer an effective strategy for optimising operations, mitigating risk or capitalising on market opportunities.
In the last ten years I have witnessed a huge increase in multi-asset class trading, as buy- and sellside firms utilise an increasingly broad array of investment strategies to improve their performance. This diversification has occurred across asset segments but also across geographies, as financial firms look for new growth opportunities.
I’ve worked in the industry for many years, and it’s not a revelation that to remain competitive and increase efficiency you need to constantly re-evaluate your business processes. Silo-based operational models, that have effectively replicated front-to-back office services across each group of asset classes traded, should not be an exception.
I would argue that to lower costs, enhance service and improve operational efficiencies there needs to be a complete redesign of front- and back-office technology infrastructures and a consolidation of operations to create processing systems able to support client needs around multiple asset segments such as equities, fixed income, FX/money markets and OTC and exchange-traded derivatives. I’m not saying this won’t be a challenging proposition for many firms, but we are seeing a growing number of our customers looking to implement comprehensive asset-agnostic processing frameworks. So, we may finally be seeing an end to the legacy silo.
Robin Kneale, is Global Head of Product Strategy, Securities Processing Solutions, at Broadridge
