FTF News interviews John Landry, CEO for Electra Information Systems, about the company’s win and industry trends.
(Editor’s note: The following Q&A with John Landry, CEO for Electra Information Systems, follows the company being voted “Best Reconciliation Solution” by our readers and industry professionals participating in the FTF News Technology Innovation Awards competition. “The award affirms the value of our working closely with clients to extend the capabilities of Electra Reconciliation,” Landry said in a prepared statement after the gala event on June 20. “The addition of n-way reconciliation has long been a need in the investment community, particularly for hedge funds reconciling with fund administrators and prime brokers. We are delighted to provide this capability, along with the ability to handle intraday reconciliations and NAV reconciliations.” Landry took time out of busy schedule to answer our awards-related questions.)
John Landry, CEO, Electra Information Systems
Q: Looking at the company’s history, why did Electra Information Systems seek to become the largest buy-side aggregator of investment accounting data? And how has that helped the company in the present?
A: Electra first established itself as a software provider with a specialist focus on automating account reconciliation and post-trade settlements.
As we successfully introduced our reconciliation solution to the buy-side community, we repeatedly heard that managers struggled to obtain and consume accounting data from custodians and other providers.
One client urged Electra to extend its offering to include data collection from custodians and we went live with data collection for this early adopter client in November 1998 in preparation for the Euro conversion reconciliation (which had to be carried out on January 1, 1999).
Data aggregation from five leading custodians was included as the service went live. In January, Electra made the service available to the wider community of investment managers. The service has since grown to include over 2,600 feeds and a wide range of data types.
Today, most clients using Electra Reconciliation also use Electra’s data aggregation service. In addition — and supported by the regular addition of new data types and new data sources — our client community has grown to include many clients who use the Electra Data service with other reconciliation solutions and to support other systems (e.g. compliance, fee billing, fund administration and others).
This adds value and provides investment managers, hedge funds, fund administrators, insurance companies and outsourcing service providers with a more complete and more valuable offering than reconciliation software alone while simultaneously allowing Electra Data to broaden its reach beyond the original purpose.
Q: Were there reconciliation trends in 2016 that Electra saw before its competitors?
Electra was early to recognize and develop support for true N-way reconciliation, allowing users to compare any number of data sets within the same view.
Standard reconciliation solutions address N-way by employing multiple two-way reconciliations viewable in separate screens and reports. With investment managers now reconciling against custodians, prime brokers, fund administrators and multiple internal systems, true N-way is far more efficient and accurate than cross-checking across multiple two-way exception reports.
Electra also launched support for intraday processing earlier than other providers.
Intraday reconciliation has become increasingly popular as investment managers look to reconcile throughout the day. Electra’s intraday reconciliation capability addresses the risks associated with waiting until tomorrow to resolve exceptions identified today. Electra utilizes a proprietary algorithm that identifies and excludes duplicate data while allowing true reconciliation updates to enter the workflow.
Q: What new developments in recs and across securities operations does Electra foresee as significant for 2017 and beyond? 
A: One of the most exciting of the new features we are currently developing is robotic process automation (RPA).
By coupling RPA with Electra Reconciliation, we can eliminate many of the manual steps in today’s break resolution process where humans interact with various systems following a well-defined process. Electra will use RPA to interact directly with existing applications for processing a transaction, manipulating and validating data, triggering events and communicating with both users and systems about the status of any business process.
Q: Can you name one aspect of securities operations, including recs, that hasn’t changed over the years?
A: The importance of having a sound reconciliation process cannot be overstated, but this can only happen when accurate and timely reconciliation data is available.
The front-office must have accurate information about its cash and securities positions if they hope to be successful in the markets. Inaccurate reconciliation output resulting from poor data contributes to critical mistakes in the trading process, which costs money and hurts investor confidence. Having access to reliable data has always been a prerequisite for reconciliation and this is one aspect of securities operations that hasn’t changed and never will.
Q: How would you describe your business philosophy? How has it served you over the years?
A: Electra strives for high-touch client relationships.
We aim to provide a highly functional, up-to-date product; regular enhancements, both big and small, that respond to customer needs; reliable, responsive support; and regular, clear communication.
That last item starts right off the bat during the sales and implementation cycles, making sure that we deliver what we sold and fully meet the client’s expectations. Once you get off on the right foot with a solid implementation, it is easy to keep customers happy with good support and regular product updates.
Keeping our clients happy with our products and services over the long term has brought many benefits to Electra. High client retention rates and steady recurring revenue contribute to growth.
Close relationships with clients bring us insight into how we can have the most positive impact from major new features to small, but helpful ease of use improvements. The overall positive atmosphere between Electra and our clients also results in high employee morale and retention at Electra, which in turns creates more value for our clients from each member of our team.
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