MetraNet provides unrivaled handling of the complex contracts, hierarchical relationships and regulatory demands faced in clearing and settlement
Growth in global trading in recent years has resulted in increases in deal volume, the development of increasingly complex trading relationships, a growing number of customized financial instruments, and an expansion in regulatory oversight that will undoubtably continue for the foreseeable future. From a previous era once characterized by late night, backroom, manual trade and reconciliation processes to this new world of 24 hour automated systems that move billions of shares and trillions of dollars every day, the Financial Services market is undergoing a revolution. Once considered the “dull” end of the industry, back office settlement and clearing operations have now become key lynchpins of the new economy.
But what are the specific drivers and challenges faced by Clearing and Settlement departments?
Regulation: The global economic crisis has brought with it a widespread call for more legislation to regulate OTC derivatives, counterparty risk and the reporting of management fees. These new regulations will be focused on managing systemic risk, protecting investors, and creating transparency, all which require greater insight into the trading process. Traditional, hard-coded, IT systems struggle to meet the unfamiliar requirements for higher levels of transaction insight and transparency, combined with the necessary flexibility in pricing, charging and billing of the sophisticated services and product packages involved.
Change and STP: Most Financial Services firms find that balancing their regulatory compliance needs with straight-through processing requirements while still addressing the increased cost efficiencies demanded in the post-trade process is an extremely taxing challenge. Gone are the days of using spreadsheets to deal with reporting, let alone to handle billing exceptions. Whether at the front end or back end of the process, the uncertainty, complexity and rapid need to adapt to the inevitable change that is taking place in the market, requires that automation and world-class auditing capabilities be built into the processes and systems involved.
Complexity: New regulations already require changes to business models and processes which in turn force a review of how—and if -- the supporting infrastructure can be adapted. Combined with new global billing relationships, older IT infrastructures simply cannot support the complexity needed to handle the new post trade processes.
MetraTech’s product, MetraNet, can meet the challenges outlined above and more. One of the key players dealing with the complexity associated with the evolving Financial Services industry is the Depository Trust and & Clearing Corp (DTCC). The DTCC chose MetraNet to manage the complexity and change inherent in the post trade settlement and clearing process. Acquired as a replacement for an older pricing, fee management and billing system, a key benefit of MetraTech’s solution for the DTCC is the insight and reporting of transaction details combined with its ability to support minimal times-to-market for new products and services.
MetraNet for clearing and settlement billing
MetraNet is a proven solution for managing change and creating innovation within the regulated and audited environment of post trade processing. It delivers a new approach to pricing, fee management, settlement and customer care, enabling settlement and clearing firms to deal with the new regulations and their inherent complexities they face without compromise.
MetraNet is unique in its ability to automate business processes and business models that address rapidly changing, complex or radical business strategies across clearinghouses, commercial banks, brokerage firms, and asset management firms. It enables these companies to create and charge for new products, to set up hierarchical billing relationships, to quickly and accurately allocate commissions and to comply with changing regulations related to transaction audit ability and visibility.
MetraTech’s Value to Clearinghouses:
Regulation: Flexibility to manage regulatory change
- Insight and reporting for both custom and standard contracts
- Sarbanes Oxley fee transparency compliance
- Granular transaction insight and reporting
Change and STP: Unparalleled reduction in time to revenue for new pricing, products and services
- Dynamic business models to calculate the margin and profitability
- Deliver better customer service and develop profitable relationship
- Expansion of the product portfolio into new markets
Complexity: Single system to control cost and manage multiple complex business relationships
- Adaptable pricing catalogue for consistent fee or commission pricing logic
- Incentive pricing for different types of customer or partner.
- Hierarchical fee management
- Automated solution to improve Straight-through processing