TCS Capital Markets Forum | Prema Aiyer Getting real
Prema Aiyer, Head of Capital Markets Global Consulting,TCS discusses how companies can differentiate themselves and gain competitive advantage in the changing regulatory landscape.
As a result some of the clear challenges industry participants are grappling with include fragmented processes, a large number of applications and related data integration issues. Silos that exist in organisations create a block for holistic planning that is necessary for creating a strategic response to regulatory compliance. We have identified three or four areas that can deliver technology differentiation, cost efficiencies and competitive advantage. One certainly is in the area of regulatory
“We have identified three or four areas that can deliver technology differentiation, cost efficiencies and competitive advantage.”
The introduction of new entities like the swap execution venues in the US and the organised trading venues in the European markets as well as multiple central counterparties means there is more attention on real time processing. The emphasis is not only to bring straight through processing (STP) in the trade life cycle processes but also better co-ordinated data management in order to have a unified view of exposures in collateral as well as in the counterparties’ and customers’ positions. The question is how are the industry participants responding to some of these changes? With the multiple overlapping regulations, it is putting a lot of pressure on the implementation and planning activities for the customers. The response has been both tactical and incremental. This has not really helped though in terms of gaining competitive advantage from the technology investment that has gone into the various automation efforts.
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reporting. As you know the various regulators have unleashed several data elements into the life cycle process at various points in time. Today organisations have to access multiple data sources for reporting data and also maintain a different set of reference data. As a result, there is an opportunity for looking at a strategic reporting platform which can deliver a nominalised way to generate reports for regulatory requirements, which in turn can also lessen the STP breaks, and lower the time and effort taken to generate reports. I think we will see consolidation or rationalisation in the clearing and settlement landscape for exchange- traded derivatives as well as the OTC derivatives market. Again this will cut costs and also STP breaks in the process. The other area that we think is relevant is
the data repository. Here again the regulation has emphasised the need for real time data information. Regardless of where the trade is executed and on which venue it is cleared, a competitive advantage can be gained from having an aggregate real-time, firm-wide view of customer exposure and collateral positions. Organisations can look at building a single consolidated data repository that would reduce data inconsistencies and also create better utilisation of the data for their processes. ■
Best Execution | Spring 2013
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