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The Challenges and Opportunities of Back Office Transparency

May 17. 2018

The financial services industry is taking a closer look than ever at back office operations. This is likely for several reasons, including the advent of the corporate digital transformation and the ongoing integration of new technology, as well as the increasing scope of financial regulation following the 2008 recession.

However, regardless of the reason, the increased scrutiny of back office operations led to executives across the board to call for increased transparency into their back office operations.

This is partly due to increased regulation. Many government regulators across North America, Europe and Asia pushed financial institutions to provide them with a clear window into daily trading and real-time access to data for market positions and intraday settlements. The entire trade cycle has come under much greater scrutiny in the last decade.

However, in doing this audit of infrastructure, many financial institutions continue to discover additional corporate benefits that could be had through increased transparency to their systems. Up until the mid-2000s many financial institutions hadn’t realized that their back office operations were running on an antiquated technology infrastructure.

Beyond the regulatory challenges, increased transparency into the back office created opportunities for decreased costs for post-trade processing. Automated solutions can turn processes that traditionally take hours can be done in minutes, and this increased efficiency also leads to a decrease in back office costs.

These fixes can come from not only integrating newer technology but unifying traditional fragmented systems. Post trade processing and reporting has historically been performed upon a clustered stack of hardware and software solutions – but now the industry is seeing options to reintegrate these processes into comprehensive settlement solutions.

Back office transparency has opened a door for financial operations and presented a new opportunity for financial institutions.

Stay tuned for more, as NRI and Thomson Reuters are partnering to bring transparency and efficiency solutions to the industry.