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Our Domains

We provide genuine cross-domain coverage for all of our Tonic services, including the set of high-growth domains below and More.
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Margin

Tonic

Collateral &
Clearing

Post-Trade

Tonic

Custody, Settlement,
Reg Reporting & More

Treasury

Tonic

Inventory, Liquidity & Capital Mgmt

Risk

Tonic

Market Risk, XVA, Credit Risk & Operational Risk

Legal

Tonic

Legal &
Client Onboarding

Digital

Tonic

Tokenization, DLT, Crypto, Digital Contracts & More

Sustainable

Tonic

Environmental, Social & Governance

Find out how we can support your firm

Get in touch

Margin

Tonic

Collateral Resilience services Overview
Collateral Resilience think Tank
MINIMISED COST OF
COLLATERAL
INITIAL MARGIN
(IM TONIC)
CLEARING OPTIMIzATION

The Collateral domain has undergone major, positive evolution in recent years, with end-to-end infrastructure uplift driven by heavy regulations and improved market solutions.  

However, a rising funding cost base and long-term market volatility have increased attention on Collateral, including its profit impact and resiliency to stress events.

All firms today should own a clear and tailored Collateral target operating model (TOM), to ensure a scalable, future-proofed operating model and sustainable cost base. Collateral TOM foundations will always include maximised end-to-end process automation and near real-time data. 

Key TOM components to achieve those goals may include a combination of new collateral workflow platform, enterprise data golden sourcing and data management, leveraging of AI, cross-product asset inventory, pre-trade analytics, collateral optimization, asset tokenization and DLT solutions, outsourcing or offshoring strategies…..and more.

On the Clearing side, despite being a more mature industry operating model, more aggressive firms continue to identify plenty of opportunities for profit growth and cost optimization, via improved IT, operational and funding solutions.

Clearing product scope also continues to expand, with Sponsored Clearing one such model receiving plenty of attention from the buy-side, due to capital, liquidity, trading capacity and risk benefits. 

Come chat to hear more about our Advise, Transform, Educate and Operate services under Margin Tonic.

Post-Trade

Tonic

CSDR
SEC T+1
CUstody TOM

The vast Post-Trade domain is now receiving high scrutiny across all firms, no longer in the shadows of front office.

Today, Post-Trade is becoming increasingly complex, driven by intensive regulations, higher volumes, strong cost base pressures and the need for process scalability. 

Ongoing market volatility and stress events are further pushing the short-term need for scalability across the Post-Trade operating model.  

As such, firms are having to quickly but carefully select new post-trade IT solutions, often vendor-led, as well as uplifting infrastructure for data, reporting and key process pain points, such as settlement (think CSDR and SEC T+1). 

Within Post-Trade Tonic weprovide a tailored suite of Advisory and Transformation consultancy services acrossthe Post-Trade domain for our clients.
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Whether focused on benchmarking, regulatory compliance, vendor selection,target operating model definition, data strategy, system implementation, ormore, we can help accelerate your firm’s objectives.

Treasury

Tonic

Treasury functions across the market have received intense pressures in recent times.

This is driven by increasing obligations (regulatory, collateral, etc), high market volatility and rapidly rising funding costs. As such, the Treasury domain has been severely tested.  

The first priority remains to meet all obligations in a timely fashion, with sufficient liquidity. The second priority is to meet those obligations cost-efficiently, whilst maximising return on investment. 

As such, the ability to instantly view all assets that a firm has available, to meet its outgoing obligations, has never been so valuable. And to achieve that, high-quality data and process automation are key.

As a result, certain operating model trends are coming through for Treasury and Operations functions. These include such areas as new data golden sourcing and data strategy, improved settlement status timeliness, near real-time asset inventories and maximised settlement automation. 

These improvements have gained further momentum due to regulations such Basel 3.1/IV, increasing capital buffers, CSDR and SEC T+1, imposing settlement fail penalties that further increase costs and erode profits. 

Other trends include buy side firms now increasingly building centralised Treasury functions, if they haven’t already, and firms leaning more and more on their custodians to provide related liquidity solutions. 

‍Treasury Tonic provides a series of tailored services for our clients, focused on improving their ability to meet all obligations efficiently, whilst maximizing returns.  

We offer various transformation services, covering key regulations, strategy, target operating model definition, vendor selection and implementation. 

Come speak to us to find out More.

Risk

Tonic

IBOR TRANSITION

Risk management continues to increase in criticality, with a robust and dynamic Risk framework a must-have to manage increasing regulatory requirements and long-term market volatility.

In recent years multiple new risk models have been introduced, such as ISDA SIMM (via UMR), FRTB and Basel 3.1/IV (reform), to better manage the evolving risks in today’s market climate.  

An unpredictable environment has also put traditional risk models at CCPs and Exchanges under intense scrutiny, with models requiring continual uplift, validation and back-testing.  

In parallel, firms continue to uplift their XVA frameworks, to ensure that risk is managed and priced adequately to clients, whilst smaller banks and buy-side firms are setting up their first dedicated XVA practices.

Operational risk also finds itself under the microscope, with increasing volumes and stress events driving the need for improved process scalability and controls across the market. 

Tonic’s Risk services cover high-quality Advisory and Transform services across all Risk sub-domains, whether market risk, XVA, credit risk and operational risk.  

Our Risk expertise is led by our family of hands-on Risk client engagements, combined with the deep Risk expertise of our Tonic specialists.

Digital

Tonic

Much like the Digital industry, our Tonic services continue to evolve as the landscape shifts.
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Digital is the future, but quickly becoming the present.

Digitisation will become the heart of the post-trade operating model in coming years, driven by the likes of DLT, tokenization, crypto and more. Digital benefits are strong and many, typically linked to the weaknesses of legacy infrastructure for custody and settlement.

To name a few, Digital will drive T0 real-time settlement, reduced need for intra-day liquidity, better use of resources, potential for 24/7 settlement , intra-day margin calls, minimal counterparty credit risk, minimised settlement fails, huge operational efficiencies and more. However, there are also a huge number of unknowns that the industry is working through, including the practicalities of how Digital technology solutions can be applied to real-life financial use cases and how it will be regulated.

The reality is that, despite the strong benefits, much work will be done incoming years to solidify the Digital operating model and allow for critical mass uptake of Digital solutions. 

Sustainable

Tonic

We offer an evolving suite of Sustainability & Climate services, focused on education, industry benchmarking, best practice frameworks and regulatory compliance.

The financial industry is finally waking up to the profit impact of sustainability and climate management. Global bodies and regulators are imposing the first related principles and standards, which we expect to drive market-wide taxonomies, measurability and reporting.

In the meantime the first x-sector, x-jurisdictional recommendations have already been produced by the TCFD (Task Force on Climate-Related Financial Disclosures), on behalf of the FSB. Early recommendations for firms include the definition of their Climate-driven governance, strategy, risk management and metrics/targets.

In parallel, there’s strong appetite amongst firms to learn more about these crucial domains, including focus areas such as ESG, ‘greenwashing’ and climate impact.  

Via education, firms are then progressively building out the foundation blocks for their own Sustainability & Climate infrastructure.  

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