Ultimately, the middle office must find ways to streamline key aspects of the trade lifecycle, says Denny Dewnarain, head of product strategy at Orchestrade.
Market volatility has become the new normal as financial markets and financial services firms across the globe are being jolted by the many shocks caused by the COVID-19 pandemic.
This is particularly true for the middle office staffs at many firms.
Market swings in trading quickly drive up the volumes that firms have to handle. They also strain the control and validation processes that the middle office staff members have put in place for the lifecycle of transactions, says Denny Dewnarain, head of product strategy at Orchestrade, via an FTF Exchange podcast.
Volatility also impacts the events that the middle office generates such as corporate actions and dividend scheduling.
Ultimately, the middle office must find ways to reduce the total cost of operations (TCO) by streamlining key aspects of the trade lifecycle validation effort, Dewnarain says. “This is really a key step for the TCO optimization,” he says.
In fact, Dewnarain says that firms want their middle offices to achieve the high levels of straight through processing (STP) that have been attained for back-office operations. One way to get there is for firms to find a way to cost effectively share the processing of lifecycle events across asset classes in the middle office – a key mission of Orchestrade, Dewnarain says.
What are the drivers for this effort to streamline middle-office processes? “I would say it’s the usual drivers – it’s profits and ROE [return on equity],” Dewnarain says.
This podcast also covers:
- The external business conditions forcing firms to rethink the total cost of their middle office operations;
- How the pandemic-induced lockdown impacts the way firms view the cost of operations and efficiency of their middle office infrastructures;
- How the ongoing pandemic is causing firms to rethink how they are handling the many steps in the processing of trades;
- How cost-cutting impacts budgets for middle office operations at most firms;
- And how regulatory compliance projects could lead to an overhaul of inefficient middle-office operations.
Orchestrade is the winner of the Best Middle Office Solution award for 2020, which is a competitive category of the FTF News Technology Innovation Awards.