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NEGOTIATING DIGITAL TRANSFORMATION IN THE TRADING ENVIRONMENT

16/05/2019

Denis Waechter, Sales Manager, IPC

We are currently in the midst of the digital trading era. Software-as-a-Service (SaaS) and cloud technologies are revolutionising the trading landscape and enabling the development of advanced practices that are closer aligned with the objectives of traders and investors.

Increased transparency, greater efficiency, and faster transactions are just some of the benefits that market participants are seeing when embracing digital disruption. The shift to digital has the capacity to transform how trading services are delivered, thus changing the traditional trading model as we have known it. As a result, we are increasingly seeing banks, regulators, fintechs, SWIFT and various companies come together to discuss how to realise the potential that digital transformation offers.

Indeed, digitalisation brings opportunities, and it’s important to know how to seize these opportunities in a way that will benefit your business. All too often, people stick to what they know, but by doing this, miss out on significant prospects and potential deals.

As the trading environment continues to evolve, it’s useful to consider the following steps as a means to optimise the manner in which innovation projects are managed through the adoption of a more global approach:

  • Strategy – develop a common vision

    A project is a bit like going on a family holiday – to get everyone to agree, you have to, along with everyone involved, have a clear objective that is simple and easily understood by all. In trading firms, the ideal would be to “adhere” your vision to that of your company or department.
  • Advantages – what would you like to gain?

Your advantages may be many: financial, of course, but also functional, organisational, competitive and operational. It’s important that advantages are explained and understood in a manner that is clear and measurable. These advantages make up an important part of the “sales argument” and allow a validation of choices.

  • People – make your “clients” your main concern

Identify the various stakeholders from the very beginning of your project. They will be your most valuable allies over the different stages of your transformation. Using the holiday analogy once more, depending on whether you travel with your children, your friends or as a couple, your target audience will be different. Adopt a communication method that is adapted to each of the stakeholders; they will not all have the same expectations. Adjusting your approach and tools to ensure everyone is on the same page will significantly help keep the project on track.

  • Process – how can it be achieved?

Digital transformation projects bring a number of new opportunities and advancements, but it’s important to ask questions about how this process will happen. For example, how has trading evolved? What tasks can be optimised or even automated?

  • Applications – recognise which applications will be affected

While new digital tools can enrich the trader’s working environment, it’s important to know the functionalities required to obtain objectives. The ability to understand the applications that will be needed and how they differ from the current solution is crucial.

  • Infrastructures – what skills are needed to manage the new infrastructure?

Between virtualisation, dedicated servers and cloud hosting, there are an array of choices when it comes to infrastructures and sales models. In an industry that’s as specific as trading, it’s important to ascertain the lifecycle of the solution and the skills required to run the infrastructure and software.

  • Networks – understand how the network will be impacted           

Networks are, unsurprisingly, key components of trading, since they support each step of the lifecycle of a transaction. They are literally the backbone of the information system. Understanding which networks will be relied on, what their specific features are, and the best ‘mode of transport’ across the network is key.

  • Services – clearly explain what users will obtain

Explaining a digital transformation project in the form of a service will be particularly useful, especially if the Information Technology Infrastructure Library (ITIL) approach has been adopted in a bid to integrate it into a catalogue consistent with the rest of the company.

Ultimately, in an environment as dynamic as that of trading where, paradoxically, the requirements for flexibility, innovation, and speed have to coexist with the need to respond to evolving and increasing restrictive regulatory requirements, it is imperative that users are involved in the digitalisation process. Companies that do this from the offset will have a much higher success rate of being at the forefront of their industry than those that don’t. Without doubt, technology remains in the service of humanity, not the other way around.

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Finance Derivative is a global financial and business analysis magazine, published by FM.Publishing. It is a yearly print and online magazine providing broad coverage and analysis of the financial industry, international business and the global economy.