The world’s largest investment banks are investing in a new breed of technology to deal with capacity problems after last month’s volume spikes exposed flaws in trading and settlement systems, forcing delays and crashes on their main platforms, Financial News reports.
One of the world’s top electronic trading banks reported volumes last month up 50 percent on July’s number, itself a record, while another large investment bank said its equity traffic has grown month-on-month this year for the first time.
“It is unusual for a volume spike to cause fatal problems in IT systems, but they can generate problems that cause delays, cut short the trading day, generate reconciliation and other operational difficulties that demand higher headcount and cost,” says Robin Kneale, a manager at Broadridge, an outsourcing supplier to banks and brokers.
Alyce Campbell, a manager at technology vendor Calypso, adds: “Banks with older systems not geared for these types of volumes were the hardest hit but most were having problems anyway. Some other banks have experienced problems because they do not have a good hold on their positions across different asset classes particularly the liquidity risk.”