Skip to content

Cloud adoption for FX post-trade workflows

Paul Williams
Paul Williams
Product Manager Post Trade FX, Refinitiv

Cloud-based solutions for FX post-trade workflows are highly effective in delivering efficiency and cost savings in a fragmented marketplace. How is Deal Tracker as a Service from Refinitiv facilitating growth for firms looking to use cloud technology so they can fully focus on their core business?

  1. Centralizing back office operations and minimizing FX post-trade processing errors is a difficult balance to strike in a growing but fragmented market.
  2. A recent Refinitiv survey on cloud adoption found that 60 percent of respondents have already moved their back office or tech infrastructure to the public cloud.
  3. The recently-launched Deal Tracker as a Service is a cloud archiving and compliance solution for FX post-trade flows, allowing clients to fully focus on their core business.

The fragmentation of FX markets has increased in the past five years, with no let up in sight.

The rise of aggregators and transparency around best execution contribute to this FX liquidity fragmentation, while liquidity venues in turn use a variety of messaging protocols providing participants with fragmented straight through processing (STP) solutions and localized post-trade views.

Deals can be transacted on conversational dealing, through brokers, single bank portals, and electronic communication networks. Liquidity providers can also be reached by their clients through multiple execution platforms.

Despite the skills of traders, this plethora of data means that the opportunity for mistakes remains high. Manual processes required around lifecycle management across multiple venues also mean that operational risk is amplified.

Consolidating activity in real time and providing a complete view means that participants can monitor lower thresholds of risk of non-compliance.

Their back office now needs to move away from local segregated teams to regional/global hubs.

With this comes the opportunity to uplift to cloud existing post-trade infrastructure, reduce technical overheads, and eliminate single points of failure.

Watch: Technology is driving smarter trading – Refinitiv at FX Week Australia 2019

FX post-trade solutions

Firms look to vendors for a one-stop shop for all their FX post-trade solutions to help with these challenges.

Furthermore, there is a move to utilize the latest in cloud-based infrastructure hosting solutions to find cost-effective and easier-to-implement solutions across the complete trading value chain.

As McKinsey recently explained, capital markets have often relied on a dual approach of implementing technology.

This involves either committing to an ‘all-in’ approach to digitalization and technologies, or more successfully using a targeted approach to build key segments and areas where technology can help create better value.

As a result, adopting the approach of using cloud-based solutions for FX post-trade workflows is highly effective in its remit to provide real value in efficiency and cost savings.

Paul Williams quote. Cloud adoption for FX post-trade workflows

Using cloud technology

This becomes even more important in the current era of compliance requirements and where access to the right information at the right time is critical for the complete workflow.

A recent Refinitiv survey on cloud adoption provided a clear indication on how firms are using cloud technology to ensure they create the best value from the adoption of technology in key areas.

More than 60 percent of respondents mentioned that they have already moved their back office or tech infrastructure to the public cloud, compared to only 32 percent that have migrated their trading infrastructure on to the cloud.

Majority migration to public cloud. Cloud adoption for FX post-trade workflows

This is a clear indicator of why using cloud technology in targeted segments can really help drive better results quickly, and why firms see the value in bringing about this change before any other segments.

Deal Tracker as a Service 

The newly launched Deal Tracker As A Service (DTaaS) is an extension of Deal Tracker, a suite of tools for monitoring and processing FX trades on all major foreign exchange platforms globally, both front and back office.

DTaaS is built from the ground up as a multi-tenant, single instance of the software and its infrastructure supports multiple branches and geographies.

The service is run in the Refinitiv cloud allowing clients to fully focus on their core business.

Consolidated STP is provided in real-time to downstream risk management systems in order to further reduce the complexity.

DTaaS Main Landing Page. Cloud adoption for FX post-trade workflowsThe service offers an intuitive user interface for operations and compliance teams to monitor trading activity across their FX business.

In a self service model, customer site administrators can provide access to the DTaaS web application to enable users locally or remotely.

This hub and spoke user entitlement is unique to DTaaS and ensures secure access and eliminates the need for each branch level location to have a separate record keeping solution.

The combination of Refinitiv’s DTaaS and consolidated STP solutions provides the industry with a scalable and secure service, dramatically simplifying post trade architecture and associated costs.

Compatible with a multi-geography set-up, DTaaS facilitates business growth for all firms looking to strategically use cloud technology.