While the buy side acknowledges that straight through processing (STP) of derivatives is more important than ever in today’s shifting regulatory landscape, many firms still grapple with workaround and manual processes, according to a survey by investment management software provider SimCorp.
For the survey, “Optimizing Derivatives Processing: ‘Alpha-tize’ your Infrastructure and Take Control of Capital,” SimCorp asked over 150 executives from capital markets firms to discuss the state of their derivatives processing systems.
Of the respondents, 74 percent said they consider “STP to be extremely important,” but 79 percent said their firm still relies “heavily on spreadsheets and manual processes when processing derivatives.”
Furthermore, 84 percent said their firm needs “to create workaround to support derivatives in their current middle and back office operations” and 82 percent said their firm requires “at least two months” and possibly much longer “to model and launch new derivatives products.”
“These figures indicate that there is an awareness amongst firms that there may be new, improved solutions that will allow them to gain a competitive advantage, but perhaps skepticism about how to move ahead,” says Janelle Wiggans, senior consultant and operations specialist at InvestTech Systems Consulting, in a written statement. “STP has always been important, but in recent years, due to changes in the OTC derivative space, the need for front-to-back STP has become even more critical.”
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