ACHIEVING AUTOMATION IN FIXED INCOME PROCESSING

Author: Alex Walker, head of post-trade securities, SunGard

As the speed and content of information dissemination increases, we adapt or lose our competitive edge.

Legend says that in Ancient Greece, after the battle of Marathon, Pheidippides ran about 240 km from Athens to Sparta to deliver word of the Greek victory over Persia. According to the story, when he arrived in Sparta, Pheidippides announced “Νενικήκαμεν” (We have won), then immediately collapsed and died from exhaustion. Even if Pheidippides needed to deliver the same message a few decades ago, he likely would have relied on a fax machine. Today’s communication expectations might be a text message sent to the Spartan army in mere milliseconds – and the texter could survive the process!

A similar evolution is happening now in the world of fixed income processing, which means that you’ll have to adapt and automate.

Fixed income has historically been an OTC market, and most of the purchasing has been of high value/low volume trades. Middle- and back-office processes have typically been relatively manual and boutique, with many Excel spreadsheets and fax messages. Until now.

If you are a regional/international fixed income brokers, you need effective and efficient communication and matching with other market participants, providing you with liquidity to offer your client base. And in terms of client service, automating your confirmations and allocations processes, be they fax-based, email-based, or increasingly electronic, enables you to improve your SLAs with your clients and differentiate yourself from the competition.

By adopting an automated approach to your fixed income operations, you can arm your front office and clients with timely and accurate information, support changing electronic processes in the international markets, enabling the front office to expand its offering and keeping your competitive edge.

So, what does the future hold? The growth of electronic markets, new regulations, central counterparties, volatility in volumes and exposure management all play a role in the new and challenging environment facing the fixed income markets. To best prepare for the future now, it comes down to achieving automation and efficiency, leaving manual process “marathons” in the past.

While you’re here…

• Learn about how you can apply business intelligence to securities operations
• See how automation can transform your middle- and back-office processes