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.