Tier 1 and 2 banks are the pace setters in what is a general trend towards greater
investment in the back-office across the sell-side.
The outbreak of volatility during Spring 2020 has cemented a trend towards greater investment in post-trade technology.
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A global market study uncovers the drivers of investment,
pinch points and future outlook of the exchange-traded derivatives post-trade industry.
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GLOBAL MARKET STUDY
The desire to achieve lower running costs
was the dominant motivation to invest
in ETD post-trade technology.
Post-trade has been an overlooked segment of the derivatives industry, but advanced new solutions are available to solve issues that the industry is currently facing with incumbent technology. Broadridge’s continual investment in its technology stack means that we are in a strong position to help firms across the industry drive transformational levels of efficiency, and adapt to the rapidly modernising post-trade landscape.”
- Justin Llewellyn-Jones, Head of Capital Markets (Equities, FX & Derivatives), Broadridge
The growing need to invest in derivatives post-trade
“
how much are you planning to invest in post-trade technology over the next three years?
Tier 1 and 2 banks
40%
Regional and smaller banks
Non-bank FCMs
Brokers
60%
80%
100%
0%
20%
More than $5m
$2.5m - $5m
Less than $250,000
$250,000 - $1m
$1m - $2.5m
The global market study also examined
45%
35%
15%
5%
28%
25%
22%
17%
8%
7%
13%
20%
47%
13%
10%
20%
40%
30%
How important is the following when
thinking about investment in post-trade technology?
(1 - not important, 7 - essential)
Concerns over compliance
and meeting new regulations
Concern with time to market for new products or clients
Desire to move away from current vendor
Desire to diversify number of vendors
Desire to consolidate components with fewer vendors
Need for speed
Concern over ability of current infrastructure to cope with high volumes
Current technology infrastructure is outdated in light of new technologies (cloud, DLT, etc)
Desire to develop strategic components to provide an edge in business
Desire to invest to achieve lower running costs in future
Methodology: This report was written by Acuiti and sponsored by Broadridge. Patrick Tessier, Managing Director of Lincoln House Consulting was the consultant on the project. Survey data in this report is based on responses and interviews with 109 senior executives across the sell-side. Respondents were from various roles within the organisation and were invited to participate directly by Acuiti. Respondents were made up of Tier 1 & 2 banks (38%), regional and national banks (25%), non-bank FCMs (17%) and brokers (20%). Respondents were from Europe (42%), North America (31%), APAC (21%), ROW (6%).
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Pinch points in current infrastructures
Where are the inefficiencies
in current post-trade infrastructure?
Drivers of future change
Which emerging technologies will have the biggest impact
on post-trade?
Increased standardisation
Why is there a need for harmonisation of data across derivatives post-trade?
100%
80%
60%
40%
20%
0%
4.90
4.68
5.59
5.01
4.07
3.05
3.13
4.66
5.26
4.77
5.01
Sponsored by
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100%