For many sell-side firms, client onboarding and certification is a drag on productivity. The traditional methods used to perform these processes are manual, and therefore time-consuming. Because the process is so labor intensive, some firms maintain substantial backlogs of clients waiting for connections to trade. Slow onboarding is costing the business, as it leads to client frustration. This is not only an issue when new clients are involved. Existing clients also go through the onboarding process each time they start to trade new markets or when the sell-side makes a major system upgrade.
Fortunately, automation now offers a solution for making onboarding and certification more efficient. Automating key manual processes can immediately help firms reduce operational costs and shorten the time to revenue, while improving the user experience as well as customer retention and satisfaction in the long term.
With this insight, why is still only about 20 percent of client onboarding automated? One assumption about automation is that it signals a mechanical, impersonal connection between firms and clients. I would rather argue for the opposite perspective; that the time saved by automating routine tasks allows for more personal interaction on more critical issues. Human contact should always be an option, available at all times when clients want.
With manual certification, troubleshooting is a laborious process which requires browsing huge log files to track down the error. Using the proper automation tools, feedback on errors can be reported clearly and identified immediately through a convenient interface.
The productivity gains are dramatic. An onboarding process that used to take weeks or months can often be streamlined down to just a few hours. But the benefits of automated onboarding and certification go beyond cost and time savings, as there is also a positive impact on quality and reliability.
Manual processes effectively limit the scope of testing, as time and budget will not allow for more complex scenarios. With automation, firms can perform more testing and do it more continuously and consistently. An advanced test platform allows for more realistic and precise test cases, by automating the entry of large numbers of data points.
There’s still no way to test every instance that could ever happen, but you can get close by taking a systematic approach to identifying scenarios and subject these to repetitive testing related to the level of risk.
Automated onboarding can be performed with built-in, instant certification and managed as a single process. This helps increase the reliability of trading systems, while making the risks involved more manageable.
Easier to upgrade
Automating the onboarding process makes it much easier for a sell-side firm to upgrade the FIX connectivity layer. During an infrastructure migration, all clients need to be onboarded again, and the broker must ensure the ability to route orders is not impacted. The prospect of doing this manually can discourage firms from performing a valuable upgrade. But if the onboarding process is automated, improving (and future-proofing) the firm’s own FIX infrastructure, it becomes a much simpler and less daunting task.
Articles & Reports In recent years, exchange-traded funds (ETFs) have seen phenomenal activity and growth. Regulation, product innovation and investor appetite have driven global Assets under management (AUM) to record levels, while also fueling increasing market structure complexity and straining trading platform capabilities across the board. Itiviti, in conjunction with GreySpark Partners, recently engaged in a comprehensive review […] May 18, 2017
Blog The fast pace of derivatives markets makes their participants a demanding group. Derivatives traders must be flexible to succeed, and also need functional capabilities in their technology such as speed, global access and powerful analytics. They confront these needs in an environment affected by new regulation, plus more demands for market access and lower costs. […] April 27, 2017
Blog In the ongoing pursuit of efficiency and cost awareness among market participants, trading technology is often at the center of attention. Still there is at least one key function in trading systems left largely untouched by productivity and streamlining measures, and that is testing. Manual testing of trading infrastructure solutions remains prevalent within today’s financial […] April 20, 2017
Blog The ability to respond rapidly to a new opportunity is a prerequisite for success in derivatives trading. Adding access to a new exchange or electronic execution venue, support for a new security, or compliance to the latest regulatory wrinkle is essential to making sure opportunities are realized and profits are made. As a result, agility […] April 11, 2017