Across the financial services landscape, competition is intense, margins are being compressed, and regulatory pressures abound. Managers understand that how they meet these challenges will determine their futures. Firms of every type, from hedge funds and investment managers to pension funds and insurance companies, are looking for ways to reduce costs while increasing efficiency and mitigating risk. As part of this effort, firms are increasingly moving toward outsourcing post-trade activities. Reconciliations, settlements, and confirmations can all be handled by a third-party provider, as well as KYC/AML, reporting, and reference data management. However, there are several factors to consider when choosing to outsource.
Brokers and asset managers alike must provide best execution to their clients, and a big part of best execution is transparency – in process, practice and performance. In fast-moving markets, there are ample opportunities for mistakes to occur, no matter how skilled the trading desk. During post-trade processing, when buyers and sellers match the details of orders, change the record of ownership and make/accept payment for securities, quality execution ensures that these tasks are carried out efficiently, accurately and transparently.