FEATURE
of functionality provided and engineering higher performance across the entire DealHub framework. Innovation to date, such as latency optimisation, limit management, margining and collateral management solutions, has resulted both from projects sponsored by clients that address immediate challenges they have as well as more strategic research, originated by the company itself.
Real-time solutions
Despite continuous innovation and improvement in post trade processes across the industry there is still significant residual cost and risk associated with FX post trade processes, and DealHub is currently developing a number of new services and business models, in response to customer demands, aimed directly at addressing these residual risks and costs, to be announced later this year.
Peter Kriskinans
“Tose forward-thinking firms that build flexibility and extensibility into the core of their infrastructures will be best placed to address the evolving regulatory and client requirements, as well as the additional stresses of increasing volumes and the accelerating pace of high frequency trading.”
an extensible framework that will enable the bank to rapidly customise the workflow. Kriskinans says that whichever models emerge from this uncertain period of regulatory, economic and technology change, it is unlikely they will be the last word; hence the need for flexibility is critical.
Frameworks such as DealHub offers the extensibility and flexibility required, by combining powerful event processing and routing capabilities with an ultra low latency connectivity layer, to manage the workflow and routing of all FX instruments to both banks internal systems and external venues, SEFs, CCPs and SDRs. Kriskinans says: “Tose forward-thinking firms that build flexibility and extensibility into the core of their infrastructures will be best placed to address the evolving regulatory and client requirements, as well as the additional stresses of increasing volumes and the accelerating pace of high frequency trading.”
DealHub invests heavily in research and development each year to innovate across pre and post trade workflow, both extending the breadth and depth
52 | october 2011 e-FOREX
According to Kriskinans, the growth of high frequency ECN-based trading (HFT) is one of the key factors driving the need for real-time post-trade processes, but equally relevant are the continued expansion of prime brokerage models and the ever increasing sophistication of trading models and technology, on both the buy- and sell-side. “All of these are driving the need and emphasis on real-time risk management solutions through the pre- and post-trade process,” he adds.
Te requirement to manage collateral for cleared products also presents some new challenges for firms. While, collateral requirements can be changed on a daily or even intra-day basis, Kriskinans says that existing PB workflows and agreements will need to evolve. He says: “While firms can leverage the clearing infrastructure they have in place for other cleared asset classes, many firms are considering FX specific solutions that integrate more deeply with their existing FX technology architectures and meet the specific needs of the FX workflows.Tere is always a trade- off to be managed between the benefits of a unified, standardised post trade landscape and the risk that introduces - the reduction of cost competition, the concentration of risk and potentially a slowing in the overall rate of innovation.”
Clearly therefore, while regulatory compliance is one of the key drivers for investment in post-trade infrastructures, the most forward thinking firms will also focus on how they can leverage their investment to further differentiate what they provide to their clients and find ways to increase revenue growth and profitability.
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