IT managers in the financial markets need to ensure that systems
are flexible enough to accommodate myriad standards for straight
through processing, an international expert has warned.
The electronic automation of the trade and clearing process for
financial transactions is one of the biggest technical challenges
for firms in global financial markets.
But progress towards seamless straight through processing has been
slow. Earlier this year the US abandoned plans to develop a
multi-billion-dollar technology for one-day settlement of
securities transactions by 2005. Firms have been left with a raft
of competing standards to connect to, but with scaled-down IT
budgets.
Jeff Gooch, executive director of Morgan Stanley, and chairman of
the Secur-ities Industries Association T+1 international committee,
said, "The IT department should be saying, 'Let's build for the
problem' but also build in flexibility to systems, so when a new
standard comes along your system can connect to it, and you can add
on new things very quickly."
Middleware, which links IT systems, technology and standards,
should form another plank of a company's straight through
processing strategy, Gooch added.
He also urged companies to check the accuracy and structure of
client reference data, which is essential information needed to
carry out trades, and is stored on large databases.