The last decade has seen an increasing demand from corporate clients for greater integration of post-trade products and services, with hot new topics often distracting the industry from the fundamentals of digitalisation. This is particularly relevant as banks look to innovate their products combined with the move towards more digital offerings; this need continues to gather even more momentum and commercial importance. Traditionally, a financial institution – such as a pension fund or insurer – or a multi-national corporate with activities spanning across the globe may have relied on a range of providers to service various aspects of their post trade activities in the respective time-zones. Be that in respect of collateral valuation, optimisation and movement, assets consolidation, securities processing, corporate action processing and settlements.
The importance for a corporate in having a consolidated “dashboard” incorporating all aspects of their commercial dealings, can lead to considerable optimisation of their activities which in turn lead to subsequent commercial savings. Having a complete overview of their cash, trade finance, trading and execution, their confirmations, their real/near real-time status updates of both collateral and assets, reasons for fails and settlement inefficiency, enables them to make more informed commercial choices and decisions and subsequently optimise their cash and/or assets in an effective manner.
“Time and experience have shown that consolidated post-trade functions enable more informed and concentrated overviews of positions”
For a corporate treasurer, this need spans across all asset classes, fixed income, equity, FX, rates, exchange and commodities as well as geographies, and incorporates also the more traditional cash management and trade finance products. Having digitalised access and workflow to product, real time execution rates, cash flow analysis across their portfolio and time horizon with integrated post trading access to for example live confirmations, collateral management, clearing, custodial and financing services all serves to ensure the treasurer has the right and up to date information with which to make the right decisions for the firm.
Time and experience have shown that consolidated post-trade functions enable more informed and concentrated overviews of positions, settlements and liquidity across the globe – thus saving reporting costs, as well as allowing decisions to be made more quickly and effectively.
That’s why, instead of being distracted by blockchain, the banking industry should be focussed on their still lagging ability to provide integrated solutions to address clients’ needs worldwide – whether in collateral management, custodian services, clearing, asset servicing, regulatory reporting or settlements. One major benefit of having a single, clear and consolidated overview is the ability to bridge and optimise activities across global time zones: banks could, for example, help mobilise excess liquidity or securities in one time-zone which is then used as collateral in order to finance funding requirement resulting from business activities in another time-zone.
“Instead of being distracted by blockchain, the banking industry should be focussed on their still lagging ability to provide integrated solutions to address clients’ needs worldwide”
The objective, as the market moves towards increased digitalisation, means that all of this information can be delivered centrally and comprehensively and in digital format which negates the need for a whole range of manual and inefficient processes with existing processes. It can also lead to the prompting or alerting of clients towards market changes and anomalies as they occur in real-time and in digital format. Again, providing a level of information and transparency where more considered decisions can be effected. Over time technological advancements serve to free up current inefficiency and enables clients to move from sometimes reactive activities to having the workload reduced, leaving more time for strategy and informed decision making. In harnessing and delivering all of this to clients, it also serves to provide a level of simplicity and immediacy which with today’s offerings can often be overly complex, cumbersome and manually intensive.