The industry is increasingly reliant on vendors to provide solutions and services which are either too difficult and/or expensive to support in-house. Collateral and post-trade domains are no exception.
This is especially the case since recent and pending regulations, such as Dodd Frank, MIFID, Initial Margin, SFTR and CSDR, have imposed heavy new processes and data requirements onto market players.
As a result, there is now a greater need for firms to choose vendor solutions to achieve their regulatory and cost-driven objectives.
The objectives for each firm will differ, though common examples include:
• The support of a new, regulatory-driven process e.g. SIMM exposure calculations
• The deployment of a pre-trade optimization service to reduce collateral funding impact
• Reducing the total Custody cost base via global Custodian service rationalization
• The cost-driven decision to deploy a Cloud-based platform
• Outsourcing of an operational process to an administrator
• The benchmarking of internal build capabilities to vendor solutions in the same space
But the Vendor Selection and Delivery cycle is long and effort-intensive. There are now often a large number of vendors to choose from, meaning the process can be complex and requiring of relevant expertise.
With key regulations pending and so much vendor choice on the market, it can be difficult to quickly work out which vendor solutions best suit your firm’s bespoke needs.