Implementing scalable cloud computing power will be a key differentiator for a firm's ability to compete in the digital age, according to a white paper from Torstone Technology and Celent.
The paper outlined an “urgent” need to devote resources to modernising post-trade systems, which are often defined by legacy technology and siloed operations.
The legacy technology and siloed operations require significant manual intervention, making it a critical source of inefficiency and operational risk.
According to the paper, cloud-based solutions have become the preferred choice due to the cloud’s ability to address operational challenges in a flexible and agile manner.
Cloud’s technology, application planning interface and microservices are the most popular choices to replace manual processes, the paper revealed.
Meanwhile, cloud technology also helps improve data management and workflows, and manage communication and electronic messaging aspects in post-trade.
Additionally, the paper found that advanced analytics and robotics solutions are gaining ground in post-trade.
This is driven by the advancement of digitalisation, data solutions, as well as cost efficient computing resources.
Post-trade is a prime target for software as a service and outsourcing as firms increasingly move away from managing operations in-house that are not a competitive differentiator, with a growing preference for managed solutions, the paper revealed.
Commenting on the research findings, Torstone CEO Brian Collings said: “Continued industry and regulatory change in the marketplace is putting significant pressures on financial firms.”
“The ongoing need to reduce costs, achieve greater control, minimise risk, ensure compliance, and drive operational efficiency has seen an increasing number of market participants partnering with technology firms that can provide highly automated, scalable and flexible solutions. The Celent white paper certainly serves to highlight that growing trend.”
Arin Ray, senior analyst at Celent and author of the paper, added: “Improving automation levels in post-trade will require modernising back office systems with new technology based on latest standards and frameworks, and simplifying the complex patchwork of systems accrued over the years.”
He said: “New technology such as cloud, process automation, and engagement models such as managed services will be important levers for improving efficiency in the next phase of this journey.”
