The FTF Exchange Podcast

What’s the bigger risk in 2026: adopting AI… or waiting too long? In this episode of the FTF Exchange Podcast, Maureen Lowe sits down with Toby Glacier, Chairman of Finbourne Technology (and a 2025 FTF News Award winner for Best Data Management Solution), to flip the usual AI conversation on its head. Instead of debating whether AI is “too risky,” Toby makes the case that the real risk is falling behind, operationally, financially, and competitively. Drawing on decades of experience leading massive global operations teams (including overseeing thousands of staff at Northern Trust), Toby shares what firms often get wrong about AI adoption, why data preparedness is the true starting line, and how AI agents can actually reduce risk when implemented with the right guardrails. They also get real about what happens when firms “try AI” and feel underwhelmed, what private markets are teaching the industry about automation gaps, and how jobs will change—not vanish—over time. If your team is still stuck in “why we shouldn’t adopt AI,” this one is your push off the dock.

Most firms can generate strong performance data internally. Fewer can deliver it to clients efficiently, at scale, and without adding more manual work. In Part 2 of our podcast series with FactSet, Maureen Lowe is joined by McKay Marschalk and David Mellars to open up the modern “reporting toolbox” and break down what actually belongs inside. We talk about automation gaps, building a reliable data pipeline, and using AI-generated commentary with human oversight. We also dig into managed services versus outsourcing, the move beyond emailing PDFs, how firms define golden data sources, and how reporting teams measure ROI through lower costs, faster cycles, and fewer manual steps. Clean data is just the start. This episode explains how the right tools, working together, are changing how firms deliver results to clients. NOTES FROM THIS EPISODE: New eBook: A Buy-Side Playbook for Reporting Success Download the latest eBook from the FTF Research Institute and FactSet, featuring insights from 325+ reporting leaders. Access the Flipbook PMCR 2026 Registration — February 24–26, NYC Join us live in New York City for the industry’s premier event on performance measurement and client reporting. Register Here Use code: FactSetAI for 15% off Explore the Full Agenda Plan your sessions and see what’s in store for 2026. View Agenda Follow FTF on LinkedIn to stay connected!

Most firms know they should be using AI for performance measurement. Fewer know how to actually do it without breaking something—or losing their team's trust in the process. In this episode, Sean Murray and David Mellars from FactSet get into the real implementation challenges. We talk about what it takes to build trust in AI-generated narratives, how to create a "golden source" of data, and navigating the shift into private markets and alternative assets. Plus, the question everyone's thinking about—what AI means for performance teams and the people on them. Some firms are already seeing wins. Others can't get out of the pilot phase. This episode breaks down why. NOTES FROM THIS EPISODE New eBook: A Buy-Side Playbook for Reporting Success Download the latest eBook from the FTF Research Institute and FactSet, featuring insights from 325+ reporting leaders. Access the Flipbook - https://www.ftfnews.com/FTF-Research-Institute/at-the-end-of-it-a-buy-side-playbook-for-reporting-success/ PMCR 2026 Registration — February 24–26, NYC Join us live in New York City for the industry’s premier event on performance measurement and client reporting. Register Here - https://pages.ftfnews.com/event-registration-2026 Use code: FactSetAI for 15% off Explore the Full Agenda Plan your sessions and see what’s in store for 2026. View Agenda - https://pages.ftfnews.com/performance-measurement-and-client-reporting-agenda

From Sticky Notes to Success Stories: What It Really Means to Mentor the Next Generation of Capital Markets Professionals by FTF News

In this episode, FTF’s Maureen Lowe explores how artificial intelligence is transforming asset management. She’s joined by Madhu Rojukhirdu, Head of Fixed Income Performance Attribution and Global Benchmark Data at AllianceBernstein, and Che Guan, Principal Data Scientist, who leads the implementation of AI models that are redefining how AllianceBernstein delivers insights to clients. Together, they discuss how AI is reshaping investment strategies, improving operational efficiency, and tackling data management challenges. In this enlightening (and occasionally jargon-filled) conversation about AI, Madhu and Che demystify how machines are now drafting client commentaries without causing compliance panic attacks. You'll learn why "garbage in, garbage out" also applies to fancy AI, discover the strange world of "robots training robots," and hear why your job is probably safe—though your tedious tasks may not be. Wondering if AI will be your new assistant or even your new boss, then this episode's for you (spoiler: it's the former...for now).

In this episode of the FTF Exchange Podcast, host Maureen Lowe sits down with Dawn Pischetola, Director of Investment Operations at Olmstead Associates, for her perspectives on why reconciliation processes—often overlooked but crucial to operational success—are now at a turning point in asset management. With transaction volumes surging and legacy systems struggling to keep pace, what does the future hold for firms still clinging to spreadsheets and manual processes? Dawn brings 25 years of front-to-back office expertise to address the pressing question: How can asset managers transform their reconciliation operations without disrupting their business? What you'll discover: • Why there a staggering number of asset managers still rely on Excel-based reconciliation processes—and the hidden risks (and costs) this creates • Insights on why firms might hesitate to modernize their legacy systems despite growing operational pressures • How AI is emerging as an "operations companion" rather than a replacement for skilled professionals • The unexpected challenges that arise when untangling years of customization during system implementations • Practical insights on building a successful business case for reconciliation transformation • Critical advice for firms facing the "reconciliation reset" as they navigate increasing data complexity and regulatory demands Whether you're considering a reconciliation system upgrade, curious about AI's potential impact on your reconciliations processes, or simply interested in how back-office transformation is evolving, this conversation offers valuable perspectives from someone who has guided numerous firms through these transitions. Show Notes: Download the survey referenced in this episode, The Tipping Point for Asset Management Operations: https://www.ftfnews.com/FTF-Research-Institute/the-tipping-point-for-asset-management-operations-the-rising-costs-of-operational-complacency/ Register for the webinar Dawn is moderating, Reconciliation Reset: The Shift from Liability to Operational Excellence: https://event.on24.com/wcc/r/4882217/F1A1671736DF17D411B4D33B678F252A?partnerref=Dawn_Podcast

In this podcast episode, Todd Juillerat, chair of the upcoming PMCR conference in New York City, shares his extensive experience and insights into the performance measurement and client reporting space. Drawing from his career trajectory that began in fund accounting and led to performance analysis at major institutions including JP Morgan, Juillerat discusses the evolving landscape of performance measurement and reporting. Key discussion points include: • The increasing convergence of performance measurement, client reporting, and risk management functions • Todd’s career and industry involvement, including the CFA Institute • Current industry trends around A.I., • Todd’s pick of PMCR conference highlights and reasons to attend the show. The discussion emphasizes the interconnected nature of performance measurement within investment management firms, highlighting how the role serves as crucial connective tissue between various departments including operations, sales and marketing, executive management, and compliance.

In this episode of the FTF Exchange Podcast, host Nick Holland speaks with Hermine Wong, a lecturer at UC Berkeley School of Law and former policy leader at Coinbase, to discuss the evolving regulatory landscape of digital assets and financial services. Wong reflects on her career journey, highlighting the intersection of law, technology, and finance, and how her early exposure to the internet’s democratization shaped her approach to crypto regulation. The conversation delves into the shifting regulatory dynamics under the Trump administration, comparing it to the previous Biden administration’s slower, report-driven approach. Wong cautions that while the current administration appears more open to crypto, its regulatory efforts may favor a select group of industry players, creating barriers rather than fostering true democratization. Further, Wong examines systemic risks, market volatility, and fraud in digital assets, explaining how financial firms can navigate regulatory uncertainty. She predicts that regulators will prioritize oversight where they have the most data, focusing on major cryptocurrencies like Bitcoin and Ethereum while monitoring broader market risks. Wong stresses that while volatility itself isn’t inherently harmful, fraudulent activities within the crypto space could have far-reaching consequences. For financial firms looking to future-proof compliance strategies, Wong advises against chasing hype, urging them to apply traditional financial risk management principles to digital assets. She underscores that crypto will not receive a regulatory free pass, and firms should continue to uphold robust compliance measures as they integrate these new asset classes. The episode offers insightful perspectives on the evolving regulatory climate, the role of financial institutions, and the future of digital asset governance, making it a must-listen for professionals navigating the intersection of finance, law, and technology.

In this episode of the FTF Exchange Podcast, hosts Maureen Lowe and Nick Holland dive into the findings of a recent industry survey conducted by AutoRek, shedding light on the current challenges and inefficiencies in asset management operations. Jack Niven and John Scappaticci of AutoRek provide expert analysis and first hand insight on the trends driving the push for automation, highlighting how firms can move past the inertia of outdated processes and embrace next-generation solutions that enhance efficiency, reduce errors, and future-proof their operations. Key Discussion Points: Survey Findings: Industry-wide pain points in reconciliation and the urgent need for transformation. Why Legacy Systems Persist: Cultural resistance, historical underinvestment in back-office functions, and the hidden costs of manual processes. The Role of Automation: How AI, DLT, and cloud technology are reshaping reconciliation and exception management. Regulatory & Market Pressures: How shifts like T+1 settlement and digital asset trading are accelerating the need for modernization. Business Case for Change: Practical steps for operations leaders to build a compelling case for upgrading reconciliation technology. Whether you’re a COO, CTO, or an operations professional grappling with daily reconciliation headaches, this episode offers valuable insights into how technology can help streamline processes, reduce costs, and improve operational resilience.

In this episode, Maureen Lowe and co-host Nick Holland sit down with Alex Shafran, Senior Vice President of Performance Analytics and Client Reporting at Cohen & Steers. Alex shares his career journey, from aspiring math teacher to financial services leader, and provides valuable advice for professionals navigating the evolving landscape of performance measurement and client reporting. Key discussion points include: • Career Insights: Alex's path into capital markets and his thoughts on taking risks, fostering meaningful professional relationships, and following opportunities. • Leadership and Team Development: Tips for empowering teams, managing responsibilities, and fostering innovation in a fast-paced industry. • Industry Evolution: Reflections on how technology, automation, and data have transformed performance measurement over two decades. • Community and Collaboration: The importance of networking, industry events, and creating spaces for peer-to-peer learning. Alex also shares inspiring stories about creating a supportive and inclusive company culture, highlighting initiatives like an "All About Me" series to strengthen team connections. Whether you're a financial professional, aspiring leader, or just curious about the human side of the finance industry, this episode promises engaging storytelling and actionable advice. Subscribe now to stay updated on future episodes featuring insights from top industry minds!

Joe reveals how he was first introduced to GIPS over 20 years ago when his firm aimed to market its products in the U.S. His expertise and passion quickly positioned him as a trusted figure in the GIPS governance space, including roles as a CFA Society Ireland President and a longstanding member of multiple GIPS committees. The Role of the GIPS Technical Committee: Joe discusses his work on the GIPS Technical Committee, describing it as a "GIPS on steroids" group that tackles complex industry topics such as trade errors, performance attribution, and verification standards. He emphasizes the value of consensus-driven discussions, even in the face of differing opinions. Challenges and Rewards of Global Collaboration: Balancing his professional role and committee work, Joe highlights the benefits of collaborating with peers from around the world. He underscores how these interactions provide not only valuable insights but also a network of professionals to exchange ideas and solve challenges. What’s Next for GIPS: Joe teases upcoming developments in GIPS, including guidance on trade errors and performance attribution, expected to be released in 2025. These updates aim to provide practical resources for firms navigating performance measurement complexities. Why You Should Listen: This episode is packed with insights into the evolving landscape of performance measurement and governance. Whether you’re a GIPS enthusiast, a performance measurement professional, or someone curious about industry best practices, this conversation offers a rare look behind the scenes of how standards are developed and refined.

The U.S. prioritized reducing settlement fails domestically but ignored the knock-on costs for international investors, which have gone through the roof.” So says industry veteran Gary Wright, director at ISITC Europe CIC, in the latest episode of the FTF Exchange podcasts. In this podcast, hosts Maureen Lowe and Nick Holland speak with Wright who delves deep into the contentious shift to T+1 settlement in capital markets, questioning whether the benefits truly justify the costs. With candid insights and thought-provoking critiques, this conversation challenges the status quo and shines a light on the overlooked impacts of T+1 on investors, issuers, and market participants worldwide. Key Takeaways:  No Clear Business Case: Despite claims of efficiency, there’s been no cost-benefit analysis demonstrating that T+1 settlement provides net value. Wright argues the high costs outweigh the limited benefits.  Impact on International Investors: The shift has introduced significant financial burdens for international participants, requiring them to hold collateral in U.S. markets, increasing costs and reducing liquidity.  Legacy Systems Strained: T+1 imposes real-time processing requirements on outdated batch systems, which were never designed for such operations, creating inefficiencies and systemic vulnerabilities.  Regulatory Gaps and Divergences: While the SEC in the U.S. has aggressively pursued T+1, regulators in the UK and EU remain hesitant, further complicating global market alignment.  Lack of Innovation or Incentives: Firms are reluctant to invest in new technology or processes without a regulatory mandate or tangible incentives, leaving the market to grapple with outdated solutions. This episode is a must-listen for financial professionals, investors, and anyone curious about the realities behind T+1 settlement and its broader implications for global markets.

In this episode, Maureen Lowe and Nick Holland of the FTF Exchange podcast chat with Sanjay Lamba, Associate General Counsel at the Investment Advisor Association (IAA). They discuss the SEC’s marketing rule, which aims to modernize and standardize advertising practices for investment advisors. Sanjay shares insights into compliance challenges and the need for firms to adapt to evolving regulations around digital communications and AI use in marketing. The conversation also touches on collaborative practices between compliance and performance teams to meet the SEC's requirements. Key Discussion Points: • The SEC Marketing Rule Overview and Compliance Challenges • The Role of AI in Marketing and Compliance Concerns • The Importance of Industry Events for Knowledge Sharing Regarding SEC Regulations Master SEC & FINRA Compliance at PMCR 2025! Don’t fall victim to FOMO, join us at PMCR 2025 Feb. 27-28th in NYC. Enter coupon code FTFPODCAST to receive a 10% off your ticket just for listening to this episode. Simple as that. - https://pages.ftfnews.com/ftf_performance_measurement_and_client_reporting For more resources from the Investment Advisor Association - https://www.investmentadviser.org/ Follow FTF on LinkedIn to stay connected! - https://www.linkedin.com/company/financial-technologies-forum Connect with Sanjay Lamba on LinkedIn - https://www.linkedin.com/in/sanjay-lamba-214a542/

Fixed income market participants are under pressure to develop systematic credit strategies and to improve their valuation and performance analytics capabilities. Yet Peter O’Connor, product manager, FINCAD Analytics Suite, Numerix, says it’s a data and computation problem much like other IT issues and firms will be able to catch up. O’Conner is the focus of the latest episode of the FTF Exchange podcast series. “When it comes to fixed income strategies, it’s a data problem. You can identify the approach you would take and typically enough … they’re looking to see which approaches work in terms of identifying mispricing,” O’Connor says. “The second challenge, then, is data and getting data in real-time or at whatever frequency is needed. The catch-up is really in that and also in adopting cloud and whether things have containers and scaling for real-time needs. So it’s data and it’s computation,” he says. “It’s very much the same old things because a lot of the analytics that we’re talking about … have always been there. Now they’re coming more to the fore and when they’re combined with real-time and doing more advanced things on top as a data-driven exercise it’s just more interesting these days.” O’Connor says. In this podcast, O’Connor:  Talks about his path to Numerix;  Reviews the finer points of the FINCAD Analytics Suite, particularly how it helps with trading and operational issues and how it fits with other offerings from Numerix;  Provides insight into fixed income markets participants and their growing demands for precise pricing and risk analytics delivered intraday; and  Covers the role FX plays in intraday fixed income transactions and the tools that firms need to navigate FX complications.

In preparation for the November 7th FTF webinar, Find True North in Sanctions Compliance: Avoid Exposure to Securities Tainted by Sanctions, our Director of Event and Content Strategy, Nick Holland, spoke with Danny McGlynn, President and Chief Integrity Officer at the Institute for Financial Integrity, about the evolution of sanctions regimes and compliance strategies. They explore how sanctions have become a key tool for addressing national security concerns, with increased collaboration between public and private sectors. Danny emphasizes the importance of adhering to Financial Action Task Force (FATF) recommendations and establishing strong compliance programs to avoid penalties. Continue this conversation and gain deeper insights by registering for the upcoming FTF sanctions webinar where Danny McGlynn and other experts from Schwab, Deutsche Bank, and SIX will discuss how to mitigate your firm's reputational, financial, and legal risks. Register here: https://event.on24.com/wcc/r/4715656/774F4EC0FA128D141D76FAFEFB49719E?partnerref=FTF-DannyPodcast Contact info: Reach out to us at [email protected] if you feel you've got something to say on the FTF Exchange Podcast.

The core of any client reporting challenge is inevitably a data problem, and the ultimate solution may be highly personalized self-service capabilities much like a media streaming service, says Andrew Barnett, chief product officer at Hub, a new provider for the global securities operations industry. Barnett is the focus of this edition of the FTF Exchange podcast. When asked about a new ecosystem for client reporting, Barnett focused on the new operating models that go beyond sending out PDFs, emails, and spreadsheets about a firm’s performance to clients. Firms will need to evolve their solutions and the services and change the historic dynamic of one-way communication for client reporting. This will mean push-and-pull engagement patterns, Barnett says. “What we’re now hearing is that people want to activate and call that data directly. They don’t want it pixel-perfect at any point in time because they’ve got broader usabilities. You have to expose that data via an API allow or other methods,” he says. “Client reporting — it is a data problem. So, certainly, the solution has to be data-driven and that data has to be discoverable, you have to be able to interact with them, and it has to be actionable,” Barnett says. “We have to allow end-users to interact with that data to generate the insights. It’s not on Hub or other providers in that space to be able to generate that insight because that is on the investment manager — that’s their IP, the USP [unique selling point] that they need to work with,” he adds. Among the reporting needs of clients is a desire for more personalized offerings. “We can kind of really see the fact that now customers are expecting that hyper personalization and shouldn’t be constrained by time or by a really heavy, kind of manual and technical engagement to get it done. It should be via no-code, low-code types of capabilities,” Barnett says. “A key part of reporting is communication and a key part of communication is collaboration,” Barnett says. It will be essential to have “those talks embedded inside of the data, the reporting solutions, and really importantly a really well-defined kind of business glossary … So that when they look at a report they can self-service to ensure they understand … It is also almost taking that Netflix world that we live in now and making it available in the institutional client reporting space.” In the podcast, Barnett also covers:  The top post-trade challenges in 2024;  The T+1 push and ultimately T+0;  The future for Books of Records;  The Ops advantages of Cloud-Native computing;  A.I. and Ops; and  Open Source software for financial services firms. Hub is a cloud-native platform provider that offers connectivity between trading and relevant data to optimize the operations technology used by investment firms. By doing so, Hub says that it enables data streaming, artificial intelligence-based technologies, and automation. Hub is a is a sponsor of FTF’s Performance Measurement & Client Reporting event taking place on Feb. 29, 2024, at Etc. Venues, 601 Lexington Ave. in New York City.

Operations teams need to shift away from multiple outdated accounting systems and data warehouses and toward an ecosystem that allows for these and related systems to talk together in real time, says Kirk Littleton, sales director at FundGuard, in this edition of the FTF Exchange podcast. These changes will definitely yield firm-wide benefits, including those for performance measurement and client reporting teams especially if firms embrace updated application programming interfaces (APIs) and data buses. “So, I think the operations people need to kind of have a paradigm shift to say: ‘I don’t need multiple accounting engines, I don’t need a big data warehouse to be the agent to push the data into other systems,’ ” Littleton points out in the podcast. “Let the APIs, let the[Apache] Kafka, the [IBM] MQ buses move that data in real time from one source to one receiving system that needs that data. Performance and client reporting are great examples,” he adds. “They need data that has been verified and accounted for properly and then I can use it in my performance calculation or I can put it on this client statement. But I don’t want to do that through a data warehouse where the data might be stale at the time I get it.” However, many firms cannot yet embrace APIs, Kafka buses and beyond because “many of the systems that are still in place today do not support those types of technologies,” Littleton says. “So, as a result, you’re still stuck with: ‘Okay, how am I going to get this data in real time from this engine to the trading system, order management, the client billing system — whatever middle office or front office tool you’re talking about.” Littleton discusses in detail some of the ways forward:  Modernize accounting systems — some systems are 50 years old;  Embrace cloud-native solutions;  Support systems that use artificial intelligence-based technologies particularly machine learning;  Move to systems that have multi-asset class coverage; and  Consider a multiple book strategy that encompasses IBORs, ABORs, performance books, and custody books to provide multiple views of a portfolio all at once. “I want to be able to go to that accounting system in real time through an API and pull the data back and then act on it. So whether I’m an OMS trading system or a performance system I want to know what I own in real time. I want to know the value of that asset in real time, any cash flows that would affect performance – I need to know that type of stuff in real time,” he says. FundGuard is a cross-enterprise, AI-powered, cloud-native and multi-asset class investment accounting platform for asset managers, asset owners, custodian banks and fund administrators FundGuard is a sponsor of FTF’s Performance Measurement & Client Reporting event taking place on Feb. 29, 2024, at Etc. Venues, 601 Lexington Ave. in New York City.

Systems based on artificial intelligence (A.I.) technologies will meet the demands of financial services firms looking for new features and IT capabilities for their performance measurement operations. It will also mean a disruption of the status quo. This is according to the latest FTF Focus podcast featuring Sean Murray, who is senior vice president, senior director, product management, at FactSet and Nina Mayers, who serves as director, performance product management, also at FactSet. “A.I. is definitely going to be one of the biggest disruptors that well see in fintech,” says Murray in response to a question about A.I. innovations and how they might improve operational efficiency. FactSet has been investing in A.I. over the years. A.I.-based systems could ease the burden of tedious processes that are part and parcel of performance measurement and client reporting. “We know that this is an area where our clients spend a lot of time today. Performance is a very data-hungry process and the activities around the onboarding of data have been something that performance practitioners have struggled to come to terms with for a long time,” Mayers says. “As we think about how A.I. can help with that process and look at the types of things where machine learning can sort of help us to replicate repeatable processes, there’s a lot of things that our clients do in terms of data checks, controls, analysis,” Mayers adds. The help with onboarding will be “before we even really get to that sort of calculation engine that we think that A.I. can have significant impact on and can help to smooth out the bumps in the operational processes that our clients experience today,” she says. The podcast also deals with new realities such as performance measurement platforms that are no longer empty boxes requiring a lot of data integration. Firms expect that the data burdens of performance measurement platforms will be easing. “The biggest thing they expect is to ease the burden of data integration side,” Murray says. “We come from the BISAM and B-One world where every client had to integrate their content sets into the application even if the content they were integrating was the same as others. So, if you’re integrating a Russell Index set or an S&P index set you’re doing the work that everyone is doing as well.” “What our clients expect is essentially for us to deliver content into the application or that to be available immediately for the clients to be able to start up and create a new strategy and for them to be able to pull benchmarks in or pull in FX rates or risk-free rates to pull that in instantaneously that’s what their expectation is,” Murray says. Mayers and Murray also discuss:  The important change to come from FactSet’s acquisition of BISAM; o The acquisition’s impact on FactSet’s managed services and outsourcing business  The benefits from performance measurement platforms and offerings in hosted, software as a service or (SaaS) aspects of key;  Vendor compression and other changes could mean the end of the line for some products and services; and  The kinds of internal IT infrastructure changes that can help firms derive the most value from performance measurement offerings via a software-as-a-solution (SaaS) mode.

Kelli Sayres, senior managing director, head of Polypaths at Numerix, says that she is not surprised that some securities firms are lagging behind others in the “huge effort” to move past Libor. They have also had to deal with other shocks to the system such as higher interest rates and inflation. “From what I’ve seen, most of our clients have been able to rise to the occasion and they were able to meet both the logistical and technical challenges that are associated with this type of migration [away from Libor],” Sayres says. “It’s huge in scale. It impacts the curve construction, the definitions of instruments, pricing, discounting, what type of data you need to get a daily reset rate, model validation, refitting behavioral models — the list goes on,” she adds. “Some firms still seem to be lagging a bit in overall migration. They haven’t necessarily validated all systems to make sure they function without interruption with the complete removal of Libor curves and vols,” Sayres says. “But given the complex ecosystems — in terms of technology and software — at large financial institutions it’s not surprising. And I do think most folks do seem to be marching steadily toward a clean and robust post-Libor framework.” Polypaths, which Numerix acquired in August 2023, is a provider of analytics and risk management solutions for financial institutions. Numerix is a provider of capital markets technology solutions and trading and risk management systems. The Numerix Data Management System was voted Best Data Management Solution in the FTF News Technology Innovation Awards competition for this year. This podcast also covers:  the ripple effects of interest rates and inflation;  structured finance issues;  machine learning; and  how Sayres was drawn to the complex world of fixed income analytics.

Securities firms searching for liquidity in capital markets are facing many challenges and factors such as high interest and inflation rates. But this situation represents a huge opportunity for firms that have liquidity and are benefitting from better management of lending and hedging decisions. So says Gil Guillaumey, head of strategy for Capital Market Solutions at Adenza, in this latest edition of the FTF Focus podcast series. Some firms are finding that market conditions are making it challenging to find liquidity. But those with liquidity many find themselves with an advantage. “Market conditions can also be a huge opportunity for institutions that are long on cash or securities and we see a very active repo market that is boosted by more electronification and CCP pushes for more clearing,” Guillaumey says. “Treasury departments will increasingly pay more and more attention to the way they invest and the risk they take. So, controlling the lending and hedging decisions is something we see them increasingly doing.” Adenza provides end-to-end trading, treasury, risk management, and regulatory compliance solutions. Adenza serves global, central, and regional banks, broker-dealers, insurers, asset managers, pension funds, hedge funds, stock exchanges and clearing houses, securities services providers, and corporates. Most recently, Adenza’s Cloud Services won Service Provider of the Year for 2023 via the FTF News Technology Innovation Awards competition. For this podcast, Guillaumey discussed:  The changing liquidity landscape;  The new costs associated with this new liquidity landscape;  How treasury groups cope with the lack of liquidity caused by high-interest rates and high inflation;  Central banking and other regulatory changes  How the new liquidity landscape & T+1 are affecting the electronic repo markets

Managed services clients and prospects of SmartStream Technologies are showing lots of interest in A.I.-based technologies and how they can impact securities operations, but there is a caveat to that evolving demand for A.I., says Nick Smith, executive vice president, managed services, SmartStream Technologies, in this latest edition of the FTF Exchange podcast series. “A.I. cannot work in a black box and nobody knows what it’s doing,” Smith says via the podcast. “It needs to be able to provide transparency to both the senior managers and the risk managers, and the regulators exactly what activity the A.I.’s been performing and what was the logic used for developing those activities. That’s where we start looking at supervised and unsupervised A.I.” In fact, the transparency will show how SmartStream has incorporated what it learned five years ago when the securities operations provider began “working with Tier 1 banks, household name banks, and partnering with them, in terms of understanding their use cases, and the challenges that they face and also having access to their data,” Smith explains. “That enabled us to invest and develop the tools that we have today … What we’re really doing is providing the agile tools for an evolving demand that we’re seeing.” In the FTF News Technology Innovation Awards competition for this year, SmartStream Managed Services won Best Outsourcing Provider, and SmartStream Air won Best Cutting-Edge Solution. During the podcast, Smith also covers:  How A.I. and machine learning are major concerns in the capital markets industry now;  How machine learning is impacting the managed services offerings from SmartStream;  The role that A.I. and machine learning play in the SmartStream Air offering;  How A.I. and machine learning can be applied to the burden of securities data reconciliation; and  The security concerns about A.I. among managed services clients.

A key requirement of the SEC’s marketing rule is the presentation of net performance data along with gross performance data, but many firms have processes in place only for gross returns, says Olivier Verburg, vice president, analytics manager at FactSet in this latest edition of the FTF Exchange podcast series. “Suddenly switching that to net will present challenges on the operational side of things,” Verburg says. The regulator says that the rule is intended to provide more transparency for investors. “I think they’re trying to make sure consumers are comparing apples to apples when they’re comparing one fund advertisement with another fund advertisement,” Verburg explains. “I think one of the main challenges is that firms may not have the processes in place to calculate net performance [at] every level that the SEC requires,” Vergburg says. “Calculating net performance on the total fund level usually is nothing new, right? Especially when many firms are GIPS compliant, which many are. Firms also need to make sure that so-called extracted performance in their advertisements is reported net of fees as well,” Verburg says. “So, an example of extracted performance in advertisements is it could be like a little table showing the sector or country returns of the funds. Or a table with returns and contributions of the top five or 10 securities,” Verburg says. “Values in a table like this need to be net of fee as well and that is something I believe pretty much no one has bothered to calculate for, therefore making it one of the main challenges.” During this podcast, Verburg focuses on:  The IT and operations changes firms will have to make;  Changes in the way performance and compliance teams interact with each other;  How firms can avoid being hurt by the new rule; and  How firms can be compliant yet leverage the rule to their benefit; FactSet is a financial data and analytics provider that offers financial services firms industry intelligence, ways to monitor portfolio risk and performance, and ways to facilitate trade execution. The company’s offerings include data feeds, desktop analytics, web and mobile applications, sell- and buy-side research tools, and client service solutions. FactSet won the Best Performance Measurement System via the FTF News Technology Innovation Awards for 2023.

For this podcast, Alex Strekel, director of investment management solutions for Clearwater Analytics, focuses on the best definition of client reporting for 2023 and many other matters. When asked to define client reporting, Strekel acknowledges that he takes a broad view of client reporting from his days working as a portfolio manager. “I think about client reporting as anything that touches the hands of the client,” Strekel tells FTF News. “So, anything that a client is going to access via a Web portal, anything they’re going to access via paper … they’re going to hear from you as the manager of the portfolio or the relationship,” he says. “Any time you’re talking about performance with a client, right, you’re reporting to them.” Based in Boise, Idaho, Clearwater Analytics is a software-as-a-service provider of automated investment accounting, performance, compliance, and risk reporting for insurance companies, asset managers, banks, and other institutions. In 2022, Clearwater won the Best Client Reporting Solution award as part of the FTF News Technology Innovation Awards competition. The company has been nominated for the same honor for 2023. This podcast also covers:  How a challenging economy changes the creation and delivery of client reports;  How firms provide scalability to the new way of client reporting;  The friction that remains between the best-of-breed & all-in-one approaches of providers;  How a firm can provide best-of-breed and all-in-one to clients, and facilitate flexibility for client reporting;  The best way for firms to decide which technology options are the best for client reporting;  And how client reporting will get more complicated over the coming years.

In this edition of the FTF Exchange podcast series, Sue Sato from the Prime Settlement Services (PSS) department at Nomura Research Institute (NRI) focuses on why NRI is offering a combination of IT outsourcing, also known as ITO, and business process outsourcing or BPO. NRI provides system solutions and consulting services such as management consulting, systems integration, and IT management and solutions for financial services and other industries. NRI has offices in New York, London, Tokyo, Hong Kong, Singapore, and Australia. Sato, whose efforts are focused on North America, takes questions from FTF News about the components of this combined offering and why it was done.

For this podcast, Alexander Sokol, founder, executive chairman, and head of quant research at CompatibL Technologies, focuses on how trading and risk models are getting an exponential boost from machine learning. For instance, the standard models for interest rates are based on incremental changes in rates but those models are falling short now as rates are in turmoil across the globe as central bankers raise rates to drive down inflation. “So, the new model types that we developed, which are called Autoencoder Market Models, are based on training the models to the entire history of interest rates not only for the currency we are modeling but also across all other currencies. This historical data that we are training our model to represents all kinds of market regimes,” Sokol says. “So, by training the model to all of the rates regimes across all currencies, these models become more effective following the change in market regime.” Essentially, the models using machine learning can look back in time to find conditions that could be similar to current conditions. By taking that history into consideration, the new models can be more accurate. The interesting fact is that this is just the start, Sokol says. Once financial services firms have laid the groundwork through cloud computing and other forms of modernization, then firms can start to explore variational autoencoders and other innovations at a time when they might need them the most. The podcast also covers:  A definition of a variational autoencoder (VAE) and CompatibL’s Autoencoder Market Models (AEMM);  How machine learning-enabled models might help with interest rate portfolios, managing limits and add-ons, and credit exposure concerns; and  How cloud computing and the push for digital transformations are helping to advance autoencoder-based models. CompatibL is a trading and risk solutions provider that Sokol founded in 2003. In 2022, Alexander was voted FinTech Person of the Year via the FTF Awards competition. CompatibL also won the best digital transformation solutions provider in 2022.

The cost of data is exploding for securities firms and that may be due to inflation and firms being locked into a data platform that sometimes comes from the same data provider, says Roy Kirby, head of core products at SIX, in the latest edition of the FTF Exchange podcast from FTF and FTF News. “I would say that now we’re back in an inflationary environment. I think that some larger companies are … locked into software platforms that are also provided by data providers. And some of those data providers are maybe taking advantage of the inflationary environment to pass on some very large yearly increases to the end customer,” Kirby says. “That’s one thing. I think the second thing is the regulatory landscape that we live in the financial world is still very fragmented. The regulations are asking for very similar in slightly different ways and sometimes overcomplicating and overlapping data points are needed,” he says. Another part of the problem is that financial institutions often use a project-based approach to meet regulatory requirements, which increases their cost-base from year to year, Kirby says. To counter rising data cost, firms can streamline their data management costs and find opportunities to maximize their data budgets. “I think one thing they can continue to do is to investigate internally and look across projects for common standards and common data linkages,” Kirby says. Firms can see “how they can link them together rather than run them as separate siloed projects.” For example, when firms are gathering ESG and cryptocurrency data, the related fund data could be taken in once and used many ways, Kirby says. “The other way is a very traditional way to cut costs and that’s to really look at your data management platforms,” he says. “Look at them and think how you can maybe split your data management platform from your data provider because if you lock yourself in too much the data provider might increase their costs over time.” The podcast also covers:  How firms can use data visualization to better understand and control their data usage;  Why data visualization appeals to younger staff members; and  How to transform an operations effort from data-heavy cost center into a revenue opportunity. SIX is a provider of financial data and services for the financial services industry. The company offers core reference data about securities, prices, corporate events, tax and regulatory data. It is also known for its flagship indices and bespoke benchmarks. Earlier this year, SIX won the Best Data Provider award in the FTF News Technology Innovation Awards. The Best Data Provider award honors the company that offers the most comprehensive global coverage in a timely manner and with a user-friendly, consolidated view. The winner in that category was seen by the voters to have a complete offering that lowers operational risks for clients.

Banks, broker-dealers, buy-side firms, and other capital markets participants are getting closer to their digital transformation goals as they put clients at the center of their journey, says Marc Natale, head of presales and marketing for America at Murex, a provider of financial software for trading, treasury, risk, and post-trade operations. Earlier this year, the Murex MX.3 platform won Software Solution of the Year in the FTF News Technology Innovation Awards. “We observed over the past two years a clear shift in the way firms think about their capital markets ecosystem, their architecture, and how they approach technology vendors like Murex,” Natale says via the FTF Exchange podcast. “It’s a clear indication that they are getting closer to their digital transformation goals,” Natale adds. “Most firms are switching from a very much product-centric approach to a client centric approach — and the client’s user experience is really at the center of this evolution. And that translates into many financial institutions requesting from vendors that their platforms have more advanced and more robust APIs.” In practice, firms “have to follow standards. They have to provide documentation as code … to avoid any learning curves on how to technically use APIs and they can insure that a working prototype can be reached in just a matter of hours,” Natale says. The podcast conversation also covers:  Whether firms might halt their digital journey because of market uncertainty;  Centralization and consolidation for trading, risk management, and related systems;  When to consider a wholesale, re-platforming effort;  When firms must consider accommodating client demands for crypto and digital asset transactions; and  How the digital push has impacted the way Murex interacts with its clients and what aspects have not changed.

Cost pressures are dominating the agenda for many securities firms and they are likely to be seriously considering new ways to consolidate their post-trade operations, says Brian Collings, CEO of Torstone Technology, via a new FTF Exchange podcast. The new consolidation can take several forms and will be impacted by major market changes such as the push for shorter, T+1 and T-0 settlement, Collings says. There can be an operations consolidation across assets such as a common middle office for equities and fixed income instruments. There could also be a consolidation across countries and regions – some firms may even consolidate globally and use a single platform. Collings also sees consolidation across functions. “I think all those pressures are forcing people to think about a new operating model. I think that new operating model is how do you consolidate more than you have in the past,” Collings says. The podcast also covers:  Torstone’s inroads into the retail trading and discount brokerage space;  What Torstone is seeing as far as crypto-based and other digital instruments; and  The middle office changes coming for firms that trade securities and are ripple effects on the front office. Torstone’s cloud-based post trade solution for the back office won the Best Innovation in Clearing & Settlement Solution award at the FTF News Technology Innovation Awards for 2022. The latest win marks the third time that Torstone won the honor as it swept the category in 2019 and 2018.

In this edition of the FTF Exchange podcast series, FTF News speaks with David Kirk, the chief technology officer for QUODD and Justin Van Til, who serves as a senior vice president, product and strategy for QUODD. QUODD describes itself as a provider of market data on demand to the global financial services industry. The upstart serves clients by providing capabilities to stream, embed, look up, or download pricing data for equities, fixed income, indices, options, futures, and end-of-day pricing for global mutual funds. The company serves banks, broker-dealers, insurance companies and financial technology providers. Van Til says the reason for QUODD’s creation was simple. Many in the securities industry were looking for better ways to secure full market and reference data services. “We decided to put the pieces together to commercialize a comprehensive source of global pricing and reference data,” he says about the company’s founders and backers. “We wanted to have a seat at the table.” The podcast covers  The top pricing, reference data, corporate actions, and analytics concerns of those firms working in wealth management such as banks, trusts, and broker-dealers;  The CEO of QUODD Bob Ward’s concept of “cutting the cord” when it comes to firms rethinking their market data suppliers;  How a new mix of offerings impacts the market data infrastructures of wealth management and investment advisory firms;  Where does process and technology fit into the conversation as far as market data aggregators and major market data providers;  How a key QUODD offerings, Universe Plus, can facilitate front-to-back office workflow links; and  The future of market data and the wealth management sector .

Participants in derivatives trading markets are coping with the need for speed driven via two very challenging trends – market volatility and the need for a pre- and post-trade holistic view of risk management for each transaction. Both situations are compelling firms to look to cloud computing, data science, artificial intelligence (AI), and other cutting-edge technologies in an effort to keep up with the competition, say Satyam Kancharla, executive vice president and chief product officer for Numerix; and James Jockle, executive vice president and chief marketing officer, Numerix. They recently took part in an FTF Exchange podcast. The market volatility is forcing firms to calculate risk in seconds and minutes rather than days. “If you think of where the markets are as far as volatility and all the uncertainty in the markets, that type of volatility underscores the need for just-in time information,” Jockle says. Monte Carlo calculations have to be launched as decisions are being made in response to market moves. At the same time, holistic risk analysis — also in real time — has become standard. “That’s driving the need across the board from the most sophisticated institutions all the way down to the smaller institutions to have … a sense of your exposure pre- and post-trade,” Kancharla says. “These decisions need to be made quickly … positions need to be entered into quickly. So, we see the need for stress testing and applying various steps of scenario analysis on portfolio holdings often in the context of … trading activity actually happening. So the need for speed is there and it’s accelerating by the minute. The podcast also covers: IT Disruptions: emerging technologies that facilitate comprehensive real-time pricing and risk analytics? Applying the Technology: Disruptive technologies that are catching fire with hedge funds Cloud Native & More: Do firms fully understand this widely used label for next generation cloud computing? Numerix is a financial technology provider that develops multi-asset-class analytics and scalable software for risk management, trading, valuations and pricing for sell-side and buy-side firms. The Numerix Oneview offering won the 2022 FTF Award for Best Cloud Adapted Solution Provider.

Despite IT advances, many financial services firms still rely on manual processes to manage collateral and related operations because their existing systems were either built internally or procured via a third party and cannot support new levels of automation, says Neil Murphy, triResolve business manager at OSTTRA. Murphy and Joakim Stromberg, senior director, head of triResolve Solutions at OSTTRA, recently took part in an FTF Exchange podcast. (OSTTRA is the new home for the influential businesses of MarkitServ, Traiana, TriOptima, and Reset, and is a joint venture between CME Group and S&P Global.) “They find themselves effectively locked into manual processes even if they want to move on,” Murphy says. “I think this perhaps reflects a wider issue for firms where they’re constrained from improving their processes and adopting new features by a requirement to either build new capability, connect to industry tools, or perform a lengthy upgrade to get access to those new features. They’re kind of held back, I think.” In his role, Murphy talks to many firms about this issue and notes that among clients there may be a lack of awareness of new developments, a reliance on traditional systems that do not have advanced IT features, a lack of time and budget to improve old processes, reluctance to change, and a belief that they may not need automation. The podcast also covers  The biggest business challenge that is pushing firms toward automation;  The first steps that firms must take to achieve collateral automation;  How firms have improved their automation levels;  The next big challenges among clients; and  the technologies and trends that firms should stay aware of

A key deadline is looming for the set of regulatory overhauls known as the Uncleared Margin Rules (UMR), which began a phased-in approach in 2016. The sixth and final phase begins on September 1 of this year. Gemma Bailey, director, business management, for triCalculate, and Neil Murphy, business manager at triResolve, both part of OSSTRA, which is the new home of TriOptima, have been keeping an eye on UMR and its manifold impacts on financial services firms. OSTTRA encompasses the businesses of MarkitServ, Traiana, TriOptima, and Reset, and is a joint venture between CME Group and S&P Global. Bailey and Murphy provide their insights via this edition of the FTF Exchange podcast series. The UMR reforms are causing operational challenges that some firms may not have seen coming, Murphy says via the podcast. The new rules “introduce a new requirement on firms to both calculate and exchange initial margin or IM and I think this is quite a significant impact because since prior to UMR firms have only been required to exchange variation margin or VM bilaterally. So for many, this will be an entirely new area,” Murphy says. Many firms that conform to a clearing model are already away of the complexities of margining. “But, in contrast to the clearing model, Reg IM is different for one key aspect — the calculation and exchange of IM is on a gross basis so firms who are in scope will be expected to post initial margin and also to receive initial margin,” Murphy says. “I think this perhaps is probably a real key surprise for firms when they begin their IM journey as they’re not really expecting that much of an operational impact. … It means you go from one VM margin call today to potentially three margin calls with those two additional IM calls each day.” Among the issues that the podcase explores are: What firms have learned from earlier UMR phases that will help them with Phase 6; The biggest challenges that firms have had when meeting their requirements & what remains their biggest challenge; Where firms should be as they move toward the Phase 6 deadline; What steps firms can take to avoid or delay their UMR Phase 6 compliance; The viability of firms monitoring their initial margin exposure so as not to exceed the $50 million threshold; and Recommendations to firms that are in scope and need to optimize UMR compliance.

Financial services firms that want to meet investor requirements for Environmental, Social, and Governance (ESG) compliance will find that it boils down to a data challenge that would be helped by greater transparency, says Todd Moyer, president and chief operating officer (COO) for Confluence, in a new FTF Exchange podcast “An area of focus for Confluence, and I think for the industry in general, is really ESG. We see ESG a data challenge at the core,” Moyer says. “Here at Confluence we’re really focused on … making it easy to combine ESG metrics and other kinds of risk and performance indicators to streamline the integration of this into the investment and risk management process.” This approach to the ESG requirement could be seen as the culmination of Confluence’s growth strategy over the past three years. In November of last year, Confluence, backed by Clearlake Capital and TA Associates, acquired Compliance Solutions Strategies (CSS), a cloud-based regulatory technology solutions vendor. In addition, Confluence acquired Investment Metrics, a provider of investment data, performance, analytics, and research software solutions. And in 2019, Confluence acquired StatPro Group, a provider of cloud-based portfolio analytics, asset data services and data management tools. Moyer provides insight into those acquisitions and the overall strategy of building, partnering, and acquiring in order to grow the company. “We’ve hit the ground running, relative to integrating the businesses,” Moyer says. “We closed those acquisitions at the end of December and we’re already actively in conversations with the market for ways to accelerate and continue to grow the joint platforms.” In the podcast, he also covers:  - What a Regulatory Book of Record (RBOR) is and how it is related to data management;  - The importance of advancing what is offered for portfolio analytics;  - The company’s move into the asset owner and asset allocator market spaces;  - How Confluence plans to stay ahead of fast-moving dynamics in the securities markets;  - And how clients are requiring vendors to provide APIs, open architectures, open-sourced software, and cloud & cloud-native technologies.

The industry push to shorten the U.S. securities settlement cycle from trade date plus two days (T+2) to trade date plus one day (T+1) will end batch processing, drive operational costs down, but may cause an uptick in operational risk, says Brian Collings, CEO of Torstone Technology, in this installment of the FTF Exchange podcast series The T+1 move will be “quite significant” for most securities trading organizations, Collings says. “I think, in a phrase, that batch processing is dead. So I think everything really needs to move to real time, event driven just to ensure all those normal checks and balances are done in time,” he says. “One of the things that we believe is that the middle office is going to play a much more active role in reducing settlement failures.” The shorter settlement cycle, led by the Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC) has recommended that American financial services firms and markets migrate to T+1 during the first or second quarter of 2024. While that effort will drive down costs, there may be trade-offs, Collings says. “I think it will certainly drive down costs. I think the capital costs for sure will get driven down and I think the exposure to market risk you’ve got a smaller window that will come down,” he says. “But I think operational risk has the potential to increase with such tight deadlines, and cost of failures if you don’t get those processes right and in place in time. So I’m not sure the IT costs will come down but I think, overall, cost to a business that should be coming down.” The podcast conversation also covered:  What Collings has learned during Torstone’s first decade in business;  The impacts of digital assets such as tokenized securities upon operations;  Torstone’s partnership with Digivault, a digital asset custody provider;  Torstone’s move into middle-office operations;  And Torstone’s product directions for 2022 and beyond?

CompatibL Technologies, a cutting-edge trading and risk management solutions vendor, has established a direct line between product development and its research and development efforts, says Alexander Sokol, founder, executive chairman, and head of quant research at CompatibL. CompatibL, which won the FTF Award last year for Best Cloud-Native Computing Initiative, bases everything it does, including product development. upon engineering and quant expertise, says Sokol, who is featured in this edition of the FTF Exchange podcast series. “At CompatibL, this line could not be more direct. This is what we prefer and this what we worked very hard to achieve,” Sokol says. “So, for us, research is what directly leads to the product. Research is also often the reason people work with us — why we get clients. I’m very proud of our quantitative research program that’s produced multiple innovations and models and numerical methods including settlement risk … I’m continuing to work very actively with our research team as well as external collaborators on things like machine learning, models for credit risk, especially pandemic era credit risk, which is especially difficult. This is something that’s … central, and I believe that this is something that defines us.” One of the ways CompatibL maintains its direct line between R&D and product development is through the use of the same analytical platform — “the CompatibL platform — for both research and commercial software,” Sokol says. This is marked difference from companies that conduct R&D on separate, different platforms and then hand over the software to engineers who then create the production software. “That’s not how we do it at CompatibL.”

While Adenza was actually fully prepared to work in a virtual world, the importance of human contact cannot be denied, says Richard Bentley, chief product and engineering officer for Adenza, who is the focus of this FTF Exchange podcast. Adenza was created from the merger of Calypso Technology and AxiomSL in July 2021. “So, I’ve mentioned technical readiness for the pandemic and the remote working situation,” Bentley says. “As a global, distributed software company we were well used to working in that way with colleagues in different geographies and across time zones … But I think by now we’ve all become appreciative that the ability to work at home is not just about the quality of your IT — you need space, you need privacy, you need quiet. And for some people it’s just not possible to find those things at home. And, for that reason, we did work hard to provide people who needed it with continuing access to the office subject to restrictions, of course.” Bentley adds that benefits “professionally and personally from everyday human contact really can’t be overstated.” This has been particularly true for new members of staff and those in junior positions who often benefit from mentoring. “What’s a quick question and a casual 10-minute conversation over a coffee in the office suddenly becomes a Zoom meeting that has to be scheduled in the calendar,” Bentley says. “So, it’s much less likely to happen than it would with people together in the same office. What that means is that people can become disconnected in this situation and that’s why regular communication becomes so much more important.” To support that human contact, Adenza has introduced video calls for all employees, less formal virtual coffee meetups, and remote social events – all facilitated by advances in technology that were essential during the pandemic lockdowns. “Even with the technology, you simply can’t recreate the creativity and energy of a group meeting,” says Bentley, noting the spontaneity of staff members bouncing ideas off of each other. The podcast also covers:  How the pandemic impacted on-cloud and on-premise support of customers;  How the pandemic changed Adenza’s customer relationships, including the onboarding of new customers;  The long-term changes for Adenza;  The long-term consequences of the pandemic upon the securities industry;  And how Adenza will react to the profound changes underway across global markets.

Are financial services firms more willing now to de-silo their operations than ever before? That question was posed to Roland Brandli, strategic product manager for SmartStream Air & TLM Aurora, during a podcast that is part of the FTF Exchange series. The TLM Aurora Trade Process Control (TPC) offering won the FTF Award for Best New Post-Trade Solution. “Definitely, de-silo is the only way to go,” Brandli says. “Apart from regulators gradually pushing into that direction, I think the biggest change is we are now in the middle of a process of transferring to instant. So, up until now, this has been always something we have talked about in the industry. But, fundamentally, the last two years and the pandemic have changed something and that is — all customers have become digital … The customer’s expectation has changed.” Generally speaking, customers expect to have instantaneous results. “But you can only achieve that if you de-silo. You cannot achieve that if have to you go through X amount of silos, X amount of processes, where people have to have … X amount of manual touchpoints,” Brandli says. “Apart from where we want to go it is being driven by the customers’ expectations.” The podcast also covers:  How working remotely compels firm to view their post-trade operations in a new light;  The typical first steps and time-frame for adopting and implementing TPC;  The TPC integration layer for in-house and third-party applications, utilities, and services;  And TPC applied to regulatory compliance operations.

Institutional investment management firms are under pressure to provide hefty amounts of ESG-related information about their funds and portfolios to clients who have environmental, social, and governance concerns. Clearwater Analytics wants to do something about that issue and other related industry challenges. While the concept of ESG-compliant funds is easy to grasp, many investment managers are struggling to gather that ESG data in part because there is a lack of useful metrics, says Steve Doire, who is the strategic client and platform advisor for Clearwater Analytics. Diore is the focus of a recent FTF Focus podcast. While there are many suppliers of ESG data, there is a lack of consistency in the metric, among other concerns, Diore says. “What we’re trying to do is come up with some kind of common set of ESG metrics. It’s probably not going to make everyone happy but it will be a way to look across managers and portfolios if we can accomplish it. We’ve got a team looking at this and right now we’re in this phase where we’re actually interviewing our institutional asset managers and talking to them about just this,” Diore says. “There’s no answer right now and I think you realize this when you see this out in the market.” Clearwater officials are also reaching out to third-party providers who are also taking on this issue. The ultimate solution from the company, which may come over the next two years, may be a combination of a third-party offering and support from Clearwater. “I wish it was solved yesterday,” Diore says. Clearwater, which won Best Client Reporting Solution for the 2021 FTF Technology Innovation Awards, has been gathering the major takeaways from two major survey efforts: an industry-wide insurance investment outsourcing report [ https://bit.ly/3mVDaLG ], and an internal survey that drew 1,000-plus respondents. According to Diore, the top takeaways via the research are:  “Many asset owners, and likewise their managers, are going into new asset classes. Everyone’s hurting for yield and they’re looking in every corner for … yield and return. ” This includes private asset classes;  “There’s a need to aggregate this information. So, if you’re investing in multiple asset classes … and you’ve got multiple portfolio management systems, you need all the data aggregated – that’s important right? Often there’s multiple systems and then it’s just brute force Excel pulling things together.”  “There’s a heightened demand for transparency for new asset classes.” The podcast also covers how data scientists at Clearwater are exploring ways to leverage the information that becomes apparent via the analysis of $6 trillion worth of activity that the vendor oversees and facilitates. Clearwater provides a software-as-a-solution, also known as SaaS, for investment data aggregation, reconciliation, accounting, and reporting.

Corporate actions processing has become a heavy burden for securities firms facing surges in trading volumes while securities operations overall become more complex each day. To ease some of that burden and remain competitive, firms are seriously considering fully automating corporate actions processing. So say Neil Sheppard, global head of business development asset servicing at SmartStream Technologies, and Adam Cottingham, head of asset servicing for SmartStream, in this edition of the FTF Exchange podcast series. FTF News recently caught up with Sheppard and Cottingham to talk about the persistent problem of the manual steps that are part of the corporate actions processing for many firms. (SmartStream won Best Corporate Actions Service Provider for 2020 in the FTF News Technology Innovations Awards competition.) While corporate actions processing touches the entire trading operation — which is mostly automated — many firms still rely upon manual processes and personnel to complete the relay of essential corporate actions data. This odd combination of IT and manual intervention has for many years “really kept the losses and errors down to an absolute minimum,” Sheppard says. “But there is a need for automation if the volumes and the complexities definitely do increase,” he quickly adds. Firms have their work cut out for them, Cottingham says. “I think many firms find these [corporate actions processing] projects quite daunting,” Cottingham says. “Traditionally, looking back to when these projects started 20 plus years ago up until quite recently, there’s been many failures – costly failures. The projects haven’t come to terms with the challenges that need to be addressed.” There are upstream integration challenges “into the custodian network or the prime network — depending upon the type of client it is,” Cottingham says. Firms also have “downstream integration challenges into the book of record for position management, forecasting, blocking, tax calculation and accounting — many, many challenges,” he adds. “Firms are also finding it hard to map all their manual processes … into the evolving standards of the market and their internal governance processes. So, the burden of change is quite heavy.” In addition, firms are moving fast to respond to increasing client demands for more real-time delivery of corporate actions information. “The number one thing here is risk mitigation — it’s the principal driver,” Cottingham says. While status quo manual processes “do address this to a large extent … the potential for loss is huge if an event is missed or misprocessed. It’s often on the service provider to make the beneficial owner whole again,” he says. Beyond the market forces, the remote staffing and service support challenges created by the global pandemic underscored again the need to automate corporate actions processing. “We have seen a change in mindset post-Covid since firms have worked from a dispersed office environment,” Sheppard says. “They really understand and realize that it’s critical to be digitized, to be automated. So, they need to achieve that operation effectively especially when BCP [business continuity planning] is enforced. So, it’s really underlined that need for control and being aware of what’s going on.” The prevalent argument for the status quo has been that with “X number of people doing this job, there are no breaks: why invest in a system?” Sheppard says. But the combined impact of rising trading volumes, real-time delivery, and remote staffing caused by the COVID-19 lockdowns has led to “automating the mandatory events, for example,” he says. By doing so, firms have learned that it “actually does free up the experts to look at the real critical stuff,” Sheppard says.

For Tobias Becker, head of risk capital optimization at Quantile Technologies, Lehman Day remains as a significant reminder of why the battle against systemic risk is ongoing. “September 15, 2008 is when Lehman Brothers … filed for bankruptcy and really almost created a snowball effect,” Becker explains in this latest edition of the FTF Exchange podcast series. That day and the Great Recession that followed mark the start of the global “drive to tackle systemic risk,” says Becker. As many may recall, that event came “very close to bringing down the global financial system,” Becker notes. “It came as a shock to politicians, to people all around the world, just how integrated and interdependent the financial system is. So, when you take one major institution out of the puzzle, the whole thing almost collapses. That was really the turning point in bank regulation and the way the public, including the politicians, sees the financial industry.” This new, more urgent push to reduce systemic risk also drives the London-based Quantile, which offers portfolio optimization support such as compression and risk rebalancing services. The company serves banks, hedge funds and other financial institutions engaged in over-the-counter derivative transactions. In fact, for the 2021 FTF Awards, voters chose the company as the “Best OTC Derivatives Margining Solution.” The podcast conversation also covers  A comparison of old school trade compression and reduction of notionals against risk reduction via a models-based approach;  The problems with internal models, the Current Exposure Method (CEM) and the Standardized Method (SM);  Key aspects of the Standardized Approach for Counterparty Credit Risk (SA-CCR);  Concerns about SA-CCR such as its lack of governance, utilities, and a hub where counterparties can share data, risk calculations;  And the new responsibilities for securities operations staffs that stem from SA-CCR and other forms of regulatory compliance.

Financial services firms are in a conundrum because they face the dual pressures of compliance with a growing list of major regulatory reforms at the same that they have to meet budgetary constraints and cut costs. One way to break through that conundrum is for firms to investigate ways to cost-effectively integrate previously autonomous trading, risk, and collateral management operations, says Sophie Foy, the global head of product marketing at Adenza, the company formed via the merger of Calypso Technology and AxiomSL. Foy is focus of the latest FTF Exchange podcast. “So, we can clearly see that all firms know that they have to change and adapt around a few new dimensions,” Foy says. Firms need to optimize their IT investments while complying with new regulation, looking for savings and bolstering profitability, she says. In general, firms are falling into two major categories — some firms have been developing and executing on a strategy while others take a more tactical approach and do only what is necessary to be compliant, Foy says. “Our most successful clients have realized that a strategic approach would require an integrated solution,” Foy says. The podcast discussion covers: 1. The implications of a major shift by sell-side firms away from dealing in exotic, over-the-counter (OTC) instruments to safer, lower-margin transactions; 2. High-volume transaction flows that have challenged IT infrastructures and IT management; 3. IT transformations away from manual workflows in a high-touch environment; 4. The new levels of possible integration among treasury, collateral, securities finance, and risk mitigation operations; 5. The lessons learned from working remotely during the COVID-19 lockdown that center on system operations and enhanced application monitoring 6. New tools that use artificial intelligence (A.I.) to sharpen calculations, improve processes, and keep capital costs under control via enhanced what-if analytics; 7. And the promise of a more virtualized future.

For Tanya Seajay, a former journalist and now CEO and founder of Orenda Software Solutions, a SIX company, the push to have environmental, social, and corporate governance (ESG) concerns guide investing is not a hippie thing but a survival thing. It’s also more than the honorable act of recycling Toward that end, Orenda, founded in 2015, applies advanced technology to social media and gathers data that will help financial services firms with their ESG investment decisions. SIX acquired a majority stake in Orenda in February 2021 as a way of expanding its capabilities in ESG and alternative data sets. “A lot of people think that ESG is sorting your garbage properly. It’s not,” Seajay says. “It’s so much more than that.” For instance, ESG encompasses “really important environmental issues that are happening around the world,” Seajay adds. “Some people are dealing with drought. Other people are dealing with flooding, and then you have all the social aspects. I mean in the U.S., we definitely saw the outcome with Black Lives Matter — one of the most talked about social issues in 2020. And then also the pandemic … It’s taken off because we’ve reached a crucial point and now there’s been a significant shift in financial thinking … It’s also important that we put our money behind companies moving in the right direction.” The podcast covers how Orenda, based in Membertou, Nova Scotia, got its start, and how the challenges of ESG data, reporting, compliance, and benchmarks are impacting the operations and investment decisions of financial services firms.

Complex corporate actions events with important voluntary aspects and ever-tighter deadlines are getting, well, more complex, says Dominique Tanner, head of content management for SIX Financial Information, who took part in another edition of the FTF Exchange podcast series. A key reason is that public companies want to make themselves more attractive to investors, Tanner adds. So, it’s probably time for securities-trading firms to seriously consider taking on the task of automating complex corporate actions to facilitate greater efficiencies and cost savings, Tanner says. It will also ease some of the related burdens of Ops staffs. “I think the industry has made progress in the last decade, and many market participants have largely automated the simple, mandatory corporate actions like interest payments, redemptions, simple cash dividends, etc.,” Tanner tells FTF News. “Simple corporate actions still account for some 80-plus percent of the overall corporate action volume. So, I think a lot of progress has been made. But now, the challenge is to go even further and automate the more complex corporate actions and finding ways to achieve even higher rates of automation, higher rates of STP,” Tanner says. The podcast, featuring host Eugene Grygo, chief content officer for FTF News and Financial Technologies Forum (FTF), also covers: The major impacts of the global pandemic upon the corporate actions processing; Some of the typical structures of complex corporate actions; Examples of typical workflows for complex processing The effectiveness of standards efforts such as ISO 20022 in mitigating risk; The prospects of automating information and instruction flows that are part of the processing chain; Whether corporate actions processing is getting too complicated; An optimal ratio of manual to automated systems as firm move to full automation; And how can firms better manage the new of complex corporate actions. Please enjoy this podcast! We invite you to continue the conversation in an upcoming webinar “Can Complex Corporate Actions be Automated?” on June 9, 2021. Register online at www.ftfnews.com

Is cloud computing turning securities firms into data hoarders? The issue came up during the latest in our FTF Exchange podcast series with two representatives from Alveo Technology, formerly known as Asset Control. FTF News got time with Nathan Wolaver, the managing director for the Americas at Alveo, and Boyke Baboelal, strategic solutions director for Americas at Alveo. When asked about the cause of the huge data volumes that firms are struggling with, Wolaver cites the widespread embrace of the cloud. “It used to be that … you had to go through the entire process of acquiring more hardware. You had to go to the CTO [chief technology officer], the CFO [chief financial officer], and say, ‘Great, listen we want to buy you know a petabyte of data storage,’ ” Wolaver says. “Now, with the cloud … people are just storing everything. So, the fact of the matter is [they’re saying] we’ll get to it later but we’re just going to store it because we don’t know what value this has … The trouble is going to be how structured is that information,” Wolaver says. The podcast also covers: Cloud-native technologies; Machine learning/A.I.; Robotic process automation (RPA); Cutting-edge and open-source technologies; Optimal retrieval of relevant data for decision-making; How to apply meta-data; Keeping data management costs under control; New directions and options for securities firms; And true transparency and scalability.

At a high level, Neil Murphy, business manager at TriOptima, says in the latest FTF Exchange podcast that the key challenges for compliance with the Uncleared Margin Rules (UMR) deadlines can be summarized as all relating to the high volumes of required tasks and the number of firms coming into scope for these regulations. In addition to the many tasks involved, UMR requires many parts of the firm to get involved: trading, risk, technology, legal, and operations, Murphy says. In general, UMR compliance is a 12-month challenge, he adds. “In terms of the volumes of firms, across the earlier four [UMR] phases since 2016 we’ve seen only about 70 to 75 firms come into scope,” Murphy says. “However, in contrast, we expect more than 300 maybe in September 2021, and upwards of 600 in September 2022. So, this volume creates its own set of challenges as firms compete for resources at the same time whether that’s custodians, counterparties, vendors, or consultants.” The podcast also covers some of the key steps involved in the following: - Average aggregate notional amount (AANA) calculation; - Figuring out a firm’s collateral processing needs; - How firms should continue to monitor their progress; - How much progress has the industry made as far as UMR Phase 5 and Phase 6; - And how should firms prioritize their efforts and resources.

In this episode of the FTF Exchange podcast, Sara Poldaas from Mawer Investment Management talks about pandemic-induced lockdowns and ongoing remote staffing and how it is changing financial services in multiple, unexpected ways. For securities operations teams and their managers, the pandemic has had personal impacts that are catalysts for change.

This this episode of the FTF Exchange podcast we speak with Henry Napier, a vice president with ICBC Financial Services, on the new challenges impacting corporate actions processing.

There are telltale signs when firms have outgrown their systems, says Patrick Murray, the founder of STP Investment Services in this episode of the FTF Exchange Podcast.

In an FTF Exchange podcast, Lisa Iagatta, chair of ISITC, talks about the challenges of going virtual and the future of the organization.