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Post-Trade Automation: The Race Toward Efficiency

Interview on post-trade automation and how brokers can improve efficiencies.

Video Transcript

Speaker 1 [00:00:11] Hello and welcome to the Info Pro Digital Studio in London. My name is Victor Anderson. Joining me today is Danny Green, Head of International Post-trade at Broadridge. And what we're going to be discussing today is Broadridge is acquisition of activity, which closed relatively recently. We'll be looking at the implications for the combined business going forward. We're going to be looking at the phenomenon of technology mutualization, what exactly that means and what it means to those firms in terms of the benefits accruing to them who are able to mutualize their technology. We're going to be looking at Broadridge is client specific pain points from a back office perspective. And finally, we'll be touching on the regulatory environment and how Broadridge as a business is helping its clients to comply with various regulations around the globe, but specifically the Asia-Pacific region. But before all that, I'd like to welcome Danny. Danny Green, welcome back to the studio. Thanks very much for making the time to come in to us and chat to us today.

Speaker 2 [00:01:16] Looking forward to it.

Speaker 1 [00:01:17] Good. Right now, as I mentioned at the top of this interview, Broadridge acquired Itiviti relatively recently. Now, as we know, Itivit has had two very strong aspects to it, the trading and the connectivity. And obviously those are now part of the kind of the Broadridge offering. What I want to know from you is firstly, what was the thinking behind the acquisition? And the second part of the question, Danny, is to what extent has the acquisition allowed Broadridge now to offer the ALSI your dancing front to back office platform that supports the entire trade lifecycle?

Speaker 2 [00:01:56] That makes perfect sense. I mean, the acquisition and the reason behind the acquisition itself is it expands bridges, capital markets capability into the full lifecycle across multiple asset classes. And in addition to that, it increases our global reach and our ability to serve our clients in a far more global way. In terms of the the key benefits that that kind of gives, there's there's one of them is that the total cost of ownership, the TCO. So by able to provide a fully integrated solution. It provides a number of things in terms of reduction in operational cost, the footprint of the overall applications and so on. There's also a reduction in risk angle to it as well, because at the point as we integrate the solutions, the usage of data between one system and another and so on becomes far more real time. And therefore, being able to provide that control and risk element to it. The final point really kind of on the benefits there is also being able to power that information which is in the middle and back office and get that into and get that back in to the front office to help some of the key decisions which are made there. So there's there's a there's a whole simplification thing that's going on there, and there's certainly scalability. And finally, being able to offer the agility for our clients as they move into new markets, new asset classes and business lines.

Speaker 1 [00:03:23] Well, we're going to be touching on scalability and interoperability a little bit later in our conversation. But for the time being, let's move on to the second point of discussion today, and that is technology mutualization. Now, it's a relatively new term. Some people probably would have heard of it, but it's generally quite a poorly defined term. So what? What I want to know from you is what it means to Broadridge as a business. And specifically, what are the business benefits accruing to firms on both sides, the industry that is the sell side in the buy side, those firms that can be in a position or are in a position to have mutualize their technology. What does it mean?

Speaker 2 [00:04:05] Many financial services firms are beginning to recognize that it's the most toxic and expedient way to prepare for the future. It is looking at mutualization. So so the definition of, you know, to me and to Broadridge from a mutualization perspective is how can we using our expertize within the local markets globally we have how can we meet the needs of our clients once by bringing our clients there as a community and providing a single solution that meets that market need. Now, the key thing around mutualization as well is that what as a as a trusted provider, what we're providing is the non differentiating part of the service. Right. So the thing that makes you the the market connectivity, the operational capability that that by us doing that and doing it to the the way which meets all the local market standards, but very much to a global standard standard. What that enables our clients then to do is give them management bandwidth and their ability to focus on the things for them which are really, really important. So it's this kind of do something once and then be able to distribute it many, many times. And then if you there's the technology side of how you enable mutualization. So, so very much in the the flexibility of how we're designing and designing our solutions now, making sure they're all kind of cloud enabled and so on. We're able to do that technology investment again in a in a mutualize place. Yep.

Speaker 1 [00:05:41] Yep. Good. Okay, let's move our focus onto the back office now. And let's talk about the specific pain points that are impacting your clients right now. Now, at the start of this interview, we talked about modularity, scalability and interoperability. To what extent are those three issues kind of entering into the conversations you are having with existing clients and also prospective clients?

Speaker 2 [00:06:07] Mm hmm. So from my existing clients and prospective ones, a lot of the conversations that they're having with internally, with their their business and then obviously with the people that they serve is how do they how do they add new products, increase the level of service to their clients, whilst at the same time meet the demands that we can talk about later from a regulatory perspective, whilst also then managing their own internal costs and creating levels of scalability so that they're the things that are kind of concerning and are on the minds of our clients. How do they achieve these kind of things? And what, you know, what we're very interested in in them conversations because because that that concept of of of multi of multi-asset and being able to if you think about it, you've got clients which are in in silos almost within their own organizations. If they can bring some of them silos together that allows them to provide a better service to their clients. It also now enables them to reduce their overall footprint of cost and so on, both legacy systems, which, you know, in some areas as you try and add new products to the missile when they're kind of creaking under that ability to change quickly and so on. Yeah. So that, that I'd say is the kind of the main areas of concerns that we're kind of hearing with our clients. The final thing I would say in this area is that you need to be able to make change incremental. I think for me, from a perspective of doing large projects, large transformations are very much what we see now is actually go in solve. So I near-term pain point and then incrementally build on that adding business value along the way.

Speaker 1 [00:08:03] Danny, let's move on to regulation now. We can't not talk about regulation. It's a perennial thorn in the side of capital markets. Firms on both sides of the industry, irrespective of where they are, their size, their location, their area, specialization, it's a really big issue. So what I want to know from you is what is Broadridge doing as a business to help alleviate the regulatory burden on its clients? Mm hmm. And if you wouldn't mind if you'd comment specifically about the Asia-Pacific region, we know that there are a number of new regulations coming down the pike, so to speak, which should be should hit the statute books relatively soon. So obviously, that's a big area of focus for you guys, too, right?

Speaker 2 [00:08:49] Absolutely. And going back almost at the beginning of our conversation when we talked about mutualization, the the there is a number of regulatory challenges out there at the moment and a successful way of how to implement them and keep current because they keep changing. And, you know, this changes on changes that come and it is really the bank to that point we were talking about mutualization. It's it's us as an organization, really what our objective is creating that kind of community effect where there's a change happening in within the market. We bring our clients together, we bring together obviously our experience from a not only from a technology, but also a transformation and from a local individual market. Similar knowledge, whether it be in Australia, Japan, Hong Kong, London, New York. So we kind of bring that that expertize together. But bringing that kind of community together, what we're then doing is we're defining together. What does that regulation mean from a capital markets perspective? What do we need to be implementing? And and by doing that, what we're doing, rather than lots of individual change is being made at individual clients. We're making it we're making that change once we're delivering that out. Back to the point I made earlier around on modern technologies, which are kind of more modular in nature and so on. If we kind of focus a little bit on the Asia side and one of the markets in specific, and if you think about Hong Kong, they there hasn't there hadn't been up until a while, a huge amount of market change. But following on from the initiatives of Stock Connect, I think back in 2014, following on from that, that's been very successful. But what it's shown within Hong Kong is that within the local market there's a number of infrastructure changes that the Hong Kong Stock Exchange need to make. I mean, there's there's free initiatives which are which are happening at the moment. One, which is what my colleagues in Asia will talk about at length is the is the sign ups project. There's there's one around IPOs. And the third one that they were working on in Hong Kong is a unique identifier being put out there for customers. And we're very much within that market working with our clients, working with with the regulatory bodies and so on. And, and kind of again, looking to what's the best way of creating that community effect. One of the other ways we were looking at doing it because is enabling this change quickly. Specifically for Asia, we've developed a concept called Fast Start which enables us to take almost like a cookie cutter mode of taking. This is how a broker needs to regulatory or pol settling clear their business within the market. So you kind of you take it and it enables you to implement a solution much quicker. Mm hmm.

Speaker 1 [00:11:49] Danny that's a great point to in our conversation on that just leads me to thank you very much for your time. Thank you for coming into the studio here at Info Pro Digital. And thank you to Water Technologies, readers and viewers for watching this video clip. I look forward to catching up with all of you at some point, hopefully in person in the not too distant future. Thank you.

 

In this interview with Waters Technology’s Victor Anderson, Danny discusses:

  • The thinking behind the acquisition of Itiviti, now Broadridge Trading and Connectivity Solutions (BTCS) and how the addition of BTCS’s trading and connectivity services has enhanced Broadridge’s ability to offer a single, front-to-back-office trading and connectivity platform to support the entire trade lifecycle.
  • What technology mutualization means in practice to Broadridge and what he sees as the key benefits accruing to capital markets firms on both sides of the industry―the buy side and the sell side―on the back of technology mutualization.
  • Broadridge’s clients’ specific technology and operational pain points right now, especially from a back-office perspective, and how interoperability, modularity and scalability help to address those challenges. 
  • How Broadridge is helping to alleviate the regulatory burden on its clients, especially across the Asia-Pacific region. 

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