Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
It's that time of year again when we reflect on the past 12
months and set course for the next year. The pandemic has had a
profound impact on society, including our industry. Among other
things, it has highlighted to me the drive and focus of our people
to continue serving clients despite extremely challenging
conditions. Our clients tell us they need us to be there for them
more than ever, to help them manage risk and operate at scale - and
that is what we are doing. So, wishing a speedy end to 2020, here's
what I see us focusing on as we start 2021.
Tools that drive connectivity and
collaboration
It's worth noting that, contrary to what is often said, there is a
high degree of standardization and automation across trades - and
not just as it relates to digitization of trade documents and
collaboration workflows. There's extensive connectivity between
systems such as ClearPar and our clients' environments. We've
delivered nearly 5 million trade documents to custodians and
trustees via SFTP this year alone, with over 10 thousand funds
enabled for this key piece of automation. The volume of electronic,
or XML, messages with trade settlement details consumed directly by
our clients, as well as by custodians (which automate cash delivery
as a result), is on track to reach an astounding 80 million this
year.
Tools such as SFTP and XML connect an ecosystem of agents, trade
counterparties and custodians and underpin the secure processing of
millions of trades. If 2020 is any indication, they will only
become more relevant in 2021.
But not every client will benefit from integration; many will
continue to log on out of necessity or preference. I'm happy to say
that throughout 2021 we will onboard these clients to a fully
revamped experience. Our beta client has successfully transitioned
to our new site, which we will continue to unify through workflows
and connectivity between trades, positions, agent notices,
reference data and more. This is an exciting milestone for such a
heavily used system and one I am immensely proud of, as is my team.
We look forward to more of our clients adopting this functionality
over the next year.
Risk management for a global network
As in other areas of financial services, one impact of the pandemic
has been that clients have very quickly increased their adoption of
risk management tools. As staff went home by the thousands in early
spring, banks found themselves in difficult situations. Nothing
focuses the mind like doing a callback to a mobile number for a
six-figure payment. One of our clients received such callbacks
while on a beach vacation!
The need to access verified payment instructions became even
more urgent in this new normal. ADFlow, our solution to the problem
of administrative details forms that are manually maintained in
multiple systems, has gained increased traction as a result. We put
our clients in control of their own data, and permission it to
relevant parties through our site as well as electronic messages.
This means that agents and trade counterparties can now review,
track and verify this data and its provenance according to each
institution's standards. Verifying payment instructions in an era
in which staff members are distributed and have no physical
supervision is more important than ever. I am pleased to say we
have quadrupled the number of trade accounts we have onboarded in
the past year and the figure continues to grow.
The year ahead
What else is in store for next year? Greater transparency,
insights and more. Trade proceeds data will at
once increase in complexity (yes, the inevitable advent of
risk-free-rates) and be easier to consume, as we enrich our XML
messages and find ways to display data more seamlessly on our site
(join our exclusive ClearPar client webinar on 21 January to learn
more about the impact of LIBOR cessation on trade settlement).
Lender-of-record (aka position) data will continue
to be enriched by additional agents joining our SOC 1-certified
Loan Reconciliation portal, already in use by 9 of the top 10
global banks. We will also see increased connectivity and workflows
between position, servicing, trade, affiliation, administrative and
reference data. Many of these connection points are already leading
to efficiencies for our clients across managed and hosted WSO
initiatives.
It's not news that we need to continue to reduce friction and
fragmentation in our industry, given the myriad, disparate
(sometimes ageing) systems that consume and process data on behalf
of market participants, as well as the seemingly unending variety
of workflows that banks, buysides and their providers follow to
close just one trade! However, the good news is that there
is also substantial connectivity to be leveraged and real-time data
flowing seamlessly. We look forward to working with you throughout
2021 to help you embrace the innovations that are available in our
industry today!
Finally, before signing off and wishing you and your loved ones
a happy and peaceful holiday season, I want to highlight some
exciting developments from across the wider Financial Services
division at IHS Markit:
Adoption of managed services has driven record growth for our
WSO team, which now supports loan portfolio administration for
clients with a
combined AUM of $500 billion.
And as firms continue to prepare for the transition from LIBOR,
you may be interested to learn more about our LIBOR
Replacement Data (LiRD),which provides actionable data
regarding fallback provisions on over 12 thousand facilities, and
our Risk-Free Rates
Calculator, which has become an important part of our clients'
toolkits.
Posted 16 December 2020 by Patricia Tessier, Managing Director and Head of Loan Platforms, IHS Markit
IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.
