Imbibing process automation is not the same as transforming the business with an industry-specific cloud-centric solution.
To drive operational efficiency in its stock lending business, an online securities broker from Japan has turn to cloud automation.
By adopting a cloud-based (software-as-a-Service) “post-trade processing solution”, Matsui Securities Co., Ltd., will finally be able to outgrow its “internally developed system for stock lending transactions” that had “become bloated, making system maintenance a significant burden,” according to the firm’s managing director (Corporate Division), Shinichi Uzawa. The post-trade processing solution is expected to “reduce our maintenance burden and facilitate far more stable management with much greater operational efficiency.”
Post-trade processing is what happens after a securities trade transaction is completed. The, the buyers and sellers will use the agreed terms of the trade to mutually approve the deal, change ownership records, and arrange for the transfer of traded securities and the cash involved. Note that over-the-counter trades, which do not rely on centralized clearing houses are also an option — but all parties will need to settle their own trades, which may expose them to counterparty risk and settlement risk.
At the back end, post-trade processing will usually include a settlement period and involve a clearing process. A post-trade processing solution works on the principle of delivering simplification, transformation and innovation across the trade lifecycle, scalable to extend to global operations.
With the solution in place, Matsui Securities will be able to process and settle all stock lending and borrowing transactions, manage the corresponding positions, compute required collateral, as well as automatically calculate fees and rebates and manufactured dividends.
According to Ian Strudwick, managing director and Head of Asia Pacific, Broadridge, the firm providing the cloud solution: “In today’s competitive online securities brokerage market, margin compression means that our clients are looking at new revenue growth opportunities and operating efficiencies,” noting how post-trade processing solutions can allow the players them to achieve their goals quickly and with ease, and which also provide the flexibility for future expansion and scalability.
