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New Priorities Emerge As Firms Grapple With Post-Trade Operations Challenges According To New Firebrand Research Report

Date 29/10/2020

Increased automation of the middle-office, and the use of secure cloud-based platforms should be key priorities for firms amid an increasingly challenging post-trade operations environment exacerbated by this year’s unprecedented market volatility, according to a report published by Firebrand Research, a provider of research and advisory services, and Torstone Technology, a leading provider of post-trade securities and derivatives processing.


According to the report, ‘Post-trade operations realities: challenges and priorities for 2021’, the recent pandemic-led market volatility and the resulting industry-wide shift to remote working have highlighted multiple post-trade challenges for firms. The most significant include a higher number of exceptions to resolve in a shorter timeframe than normal; longer settlement chains where a failure to deliver caused multiple failures downstream; resolving the backlog of operational processing caused by market volatility, leading to an increase in operational risk and, lastly, pressure on collateral management systems as firms were required to engage in a significant increase in collateral substitutions and margining activity.

The report found that firms are responding and adapting to these challenges at a varying pace but the need to digitally transform their operations and move away from legacy platforms is widely recognised. Some of the technology adaptations being made include increased automation in the middle-office, use of secure cloud-based platforms that enable access from any location and can scale up to meet high processing demands in real time, and more use of APIs to allow seamless integration to a range of services.

The report concludes by highlighting that sell-side firms will need to re-evaluate their current processes with a view to better supporting remote working and dealing with continued market volatility, in addition to satisfying regulatory demands for improved operational resilience.

Commenting on the report, Mack Gill, COO, Torstone Technology, said, “Secure and efficient post-trade processes are attracting more attention than ever amid an unprecedented environment of market volatility which is increasingly under regulatory scrutiny. Moving away from manual processes and legacy technology will ensure increased efficiency, reduced costs, and improved operational risk management in the long term, as well as satisfy regulatory requirements. Making these changes should be a strategic priority for firms today as we move forward to 2021 and beyond.”

Please join Torstone Technology for a virtual panel discussion on the findings of the report on 24th November 2020 at 3pm GMT / 10am EST. Panel members will include Virginie O’Shea, Founder of Firebrand Research and Mack Gill, COO of Torstone Technology. Register here.