We provide genuine cross-domain coverage for all of our Tonic services, including the domains below and More.
Collateral & Clearing are at our core.
See below for a subset of our related services.
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 Collateral cost base and long-term market volatility have increased attention on Collateral's profit impact.
All firms today should own a clear Collateral strategy, covering a variety of tailored solutions to avoid an unsustainable cost base. Today those solutions might include IT-driven automation, a new collateral workflow platform, an outsourcing or offshoring strategy, pre-trade analytics, collateral optimisation and more.
On the Clearing side, despite being a more mature operating model, firms continue to identify plenty of opportunities for profit growth, including IT, operational and funding solutions.
Clearing product scope also continues to expand, with Repo Clearing (and Sponsored Repo) one such model receiving plenty of attention via capital, liquidity, trading capacity and risk benefits.
We provide tailored services within Treasury, Custody & Settlement for our clients.
Whether focused on regulatory compliance, vendor selection, target operating model definition or more, we can help accelerate your objectives.
Treasury & Custody are domains that have been severely tested in recent years, mainly by the impact of market volatility and ongoing spikes in obligations. The ability to quickly mobilise and optimise assets around a firm, to where they are the needed the most, has never been so valuable.
In parallel, the need for a real-time asset inventory view and automated settlement infrastructure continues to grow stronger, as volatility and volumes remain high. This is amplified by regulations such as CSDR imposing penalties for settlement fails, further adding to cost burden and profit deterioration.
Firms are leaning on their Custodians to provide them with related solutions, who continue to expand their scope of financing, liquidity and inventory services.
Much like the Digital industry, our Tonic services continue to evolve as the landscape shifts.
Digital is the future, but quickly becoming the present.
Digitization 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, minimized 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 in coming years to solidify the Digital operating model and allow for critical mass uptake of Digital solutions.
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 close to imposing the first related principles and standards, when we can expect market-wide taxonomies, measurability and reporting to become the norm.
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 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.
We leverage our expertise to provide high-value Risk advice and transformation services, creating customised Risk solutions across multiple domains and products, including:
Model governance and back testing solutions
Best practice frameworks
Vendor assessments and selection
Evolving market requirements
Risk management has become an increasingly critical function, with a robust and dynamic framework needed to manage Risk across increasing regulatory requirements and ongoing market volatility.
In recent years new risk methodologies have been introduced such as ISDA SIMM (via UMR), FRTB and Basel III (reform), whilst an unpredictable climate has put traditional risk models at CCPs and Exchanges under intense scrutiny. In parallel, firms continue to uplift their XVA frameworks to ensure increasing and evolving risk is managed and priced adequately.
Risk models and techniques continue to evolve at great pace across different domains and products, with best practice frameworks having to keep up.
We leverage our Legal & Onboarding domain expertise to accelerate tailored, high-quality solutions for our clients. Our transformation expertise then comes into play to ensure that we define and deliver those solutions, at pace.
In a world of continued regulation, Legal & Onboarding technology infrastructure is slowly getting the attention it deserves.
In recent years we’ve seen a strong influx of Legal technology vendor solutions, to automate burdensome and error-prone tasks such as legal contract templates, legal negotiations and contract data extraction. But there’s a spectrum of Legal infrastructure maturity amongst market participants, with plenty of firms still going ‘old-school’ via manual, unscalable processes and poor quality data.
Likewise, the onboarding of clients at scale to new vendor platforms and services has become an industry priority, often driven by new regulatory requirements. More automated, user-friendly and streamlined onboarding processes and portals are rightly becoming must-haves.
With a never-ending stream of regulation to come, many firms will be looking to leverage the current climate to take steps towards their Legal & Onboarding target operating model, sooner rather than later.
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