The benefits of technology simplification

On the release of its whitepaper on technology simplification along the trade lifecycle, Global Custodian spoke to Vijay Mayadas, president, capital markets at Broadridge about the market context for such an initiative.
By Richard Schwartz

Vijay Mayadas, president, capital markets, Broadridge

Is the siloed way decisions are made about technology in the front-, middle- and back-office of an enterprise a hindrance to progressing simplification?

If you think about a lot of large capital markets firms, they have – for very good reasons – grown up over the past few decades really specialising in certain asset classes and certain geographies, and in some cases through acquisition. This has resulted in a large number of disparate technology stacks and technology teams all around the world with their own ways of thinking about technology.


It’s a natural outcome of the way these firms have grown organically over time. Many of them have reached a point now where they really have to optimise their technology assets. Given market pressures, margin compression and the pace at which new technologies are coming to the market, the appetite for simplification is growing.


What’s the best way of managing change towards simplification? Do you start within each silo or do you look across the enterprise and start at a high level?


A lot of firms have tried to steer away from big bang technology projects. They typically prefer a much more incremental approach with quick wins and the ability to make relatively small investments and demonstrate traction.


With microservices-based architecture, you now have the ability to introduce new components that help simplify technology with a lot less risk. The evolutionary approach does tend to focus on the back-office, the middle-office and the front-office separately. For example, in the back-office or in the post-trade world, we’ve seen clients with many different types of fixed-income systems across EMEA, APAC and North America. And we have helped them simplify that fixed-income, post-trade technology stack. They now have a single real-time platform that reduces a lot of risk in the way they run their fixed income business on a global basis.


You can do that independently of what you’re doing in the middle-office and in the front-office. In the front-office, we’re partnering with firms to help them simplify their order management footprint. And you can, again, do that independently of what you’re doing in post-trade.


At the same time though, it’s possible to build new technology that deepens the integration between your front-office platform and your post-trade platforms, knitting them together in a much more effective way.


It’s very hard to force-fit a singular approach. What we focus on a lot is how to customise the journey for each client.


When it comes to buying technology, a lot of firms have a best-of-breed approach. Is that compatible with simplification?


The journey around simplification is one of not only simplification, but also modernisation. Using the latest architectural design principles gives you a more agile technology stack that’s more responsive to change. The ideal situation is for a firm to be able to do both together: leverage best in breed technologies while simultaneously simplifying.


We’ve spent a lot of time with customers, helping them understand how to break down that journey, how to do it in a sequential way with a clear sense of outcomes and risk.

Over time, we are also seeing more game-changing technologies come to market. Fundamentally, capital markets firms are built on workflows that execute trades and manage risk and compliance. These technologies will offer the ability to more fundamentally reimagine those workflows, with major implications


One example I gave in the whitepaper is the use of smart contracts in certain types of activities. Smart contracts, combined with an underlying DLT platform, can drive a step change reduction in the complexity of those workflows. I think we’re at the beginning now of a profound change in the way people are going to think about workflows.

For more information, please click here to read the whitepaper.