SimCorp Derivatives Processing Poll Reveals that the Buy Side Still Grapples with Workarounds and Manual Processes

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21 July 2014

SimCorp, a leading provider of investment management solutions and services for the global financial services industry, today announced results from a survey conducted during a recent webinar entitled, “Optimizing Derivatives Processing: ‘Alpha-tize’ your Infrastructure and Take Control of Capital.” With asset managers globally placing increasing emphasis on derivatives strategies, the poll aimed to gauge the importance of STP for derivatives processing. Respondents included over 150 executives from capital market firms mainly in North America.

Key Poll Finding:

  • 74% consider STP to be extremely important when it comes to derivatives processing.

However, further poll results revealed:

  • 79% still rely heavily on spreadsheets and manual processes when processing derivatives.
  • 84% need to create workarounds to support derivatives in their current middle and back office operations.
  • 82% require at least two months to model and launch new derivatives products and sometimes significantly more utilizing their current systems.

“These figures indicate that there is an awareness amongst firms that there may be new, improved solutions that will allow them to gain a competitive advantage, but perhaps skepticism about how to move ahead,” explained Janelle Wiggans, Senior Consultant & Operations Specialist at InvestTech Systems Consulting. “STP has always been important, but in recent years, due to changes in the OTC derivative space, the need for front-to-back STP has become even more critical. Operations teams should look to use STP wherever possible throughout the derivatives lifecycle in order to increase efficiencies, reduce processing time and dependency on manual ‘systems’ and spreadsheets, to provide transparency into audit trails and to ensure accurate reporting to management.”

“The derivatives market, especially OTC derivatives, presents its fair share of challenges. Individual derivatives trades can have a substantial effect on the portfolio in terms of exposures to various market factors,” said JørgenVuust Jensen, Domain Manager, Business Foundation & Financial Instruments at SimCorp. “Therefore, having technology in place that streamlines processes and provides a constantly updated consolidated view on the portfolio composition becomes essential.”

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