Automated Post-Trade Reporting is No Longer a Nice-to-Have

According to the May issue of Wall Street & Technology magazine, 2011 is the Year of Compliance and the Cloud. We’ve all heard the hype around cloud computing, and not a day goes by where you don’t hear about looming regulation and the impact it will have on the capital markets industry.

What is missing from the headlines is that client reporting is now a top priority among financial firms, with technology budget behind it. According to a recent survey by Aite Group, client reporting ranked at the top of the list in terms of capital markets firms’ IT priorities this year.

For those of us at Firm58 who spend our days working with institutional brokerages, bulge bracket firms, stock exchanges and execution venues, we are in the unique position to see how transformative client reporting can be to the business of trading.

Client reporting is no longer a simple report showing client trades or a client statement showing balances and positions that is distributed once a month via paper or – at best – a static report emailed monthly.

Today, client reporting has to be real-time because changes to rates need to happen quickly, adjustments about where to direct order flow must be timely, and everyone charged with the responsibility of revenue needs to see cost drivers on a daily basis. Whether it’s a high-level trend report or detailed trade data, this detailed information must be streamed in real-time to clients.

Firm58 clients use reporting to show more than just what they traded and when, but who they traded with and the total cost of the trade. Powerful search capabilities enable our clients to find data faster. Information aggregated in multiple ways by group, by asset, by contra party, by time, etc, provides unique perspectives and deeper insight. Trending analysis is then available to easily identify patterns and provide a high-level data perspective and easy access to details.

The competitive advantage our customers realize by way of client reporting is truly transformative. These firms have automated their access to critical information including the identification of their the top customers by revenue, volume, and cost.

Much has been written about the urgency of automating middle and back office processes, but we are now seeing that it’s no longer optional if a firm is serious about competing in today’s global economy. In a recent Firm58 survey of capital markets firms, 91% said their buy-side clients demand more transparency into the post-trade process than they did three years ago.

With increased competition driven by a poor economic environment, firms can no longer sit on the sidelines and rely on spreadsheets and slow manual processes. To keep existing clients and fight for new business, they have to do more. Understanding venue/exchanges costs changing daily and weekly by way of automated reporting is a good place to start.