The OTC derivatives rules will transform operations for the buy and sell side. Firms will need to monitor, move and mobilise collateral more quickly and efficiently, as well as improve transparency and reduce risk associated with their cleared OTC derivatives. Banks, brokers, custodians and their buy side clients need to consider how to improve operational processes while the majority of these procedures are not currently automated or standardised.
The new rules encourage firms to adopt the industry instruments (centrally cleared and executed on electronic trading venues) but in my view, and many peers in the market agree, these are out of date and do not meet the needs of market. To bring the OTC derivatives market up to date, the industry will need to work together to introduce common processes and improve efficiencies in the back office. Although as a highly competitive marketplace, collaboration is not easy.
I’ve spent numerous years working in banks and delivered key initiatives to help revolutionise the financial markets, and I think the best way to develop a solution (similar to my experience developing AMQP, an open standard for business messages) is for a central team to work with the key industry players, gather feedback from firms while ensuring the solution meets the overall objective, in this case to advance the OTC derivatives market.
This is our philosophy at Taskize. We have listened to firms across the finance sector and understand the complexity of the challenges associated with the new reforms. To help, we have developed a collaborative tool for the back office enabling them to communicate and work with counterparties, clients and other firms across the industry to tackle and resolve exceptions, disruptions and disputes across multiple asset classes effectively.
Taskize offers the industry a standard mechanism to collaborate globally to connect with the right people to manage exceptions. Ownership is passed between users and flags help to identify those currently responsible for the issue, ensuring that progress is made and exceptions are resolved quickly.
Providing the back office with utility tools such as Taskize, will help firms manage their risk and regulatory compliance, and ultimately, the efficiencies gained from more efficient exception resolution will enable the faster movement of collateral to advance the OTC derivatives market.