As part of its overall push to better integrate its various solution sets following so many acquisitions over the last few years, SunGard has created a new division focused on supporting the position, risk and operations functions within financial institutions. Various parts from the old brokerage and clearance business, the wider capital markets group and the ex-GL Trade business have therefore been combined to form the new division, which also has a strong proposition in the risk and data management spaces, says Tony Scianna, who is executive vice president, product management and business development for the division.
Surprisingly, data management solution Fame is not part of the new division; instead it remains in a separate business line under Janet Crowley, general manager, with the other market data solutions including MarketMap. However, Scianna’s division does contain the Stream portfolio of products, which are focused on providing users with support for the middle and back office functions and requirements, including data management and regulatory reporting. One of the flagship products is StreamCore, a data management framework that normalises, consolidates and simplifies data from disparate applications into a single repository.
As well as the Stream products, PRO, as it is known internally, also includes brands such as Adaptiv for risk management and Astec Analytics for analytic solutions for trading, performance measurement and programme management. The aim of the restructure has been to create a front to back suite that overs the full trade lifecycle, he contends.
Scianna explains that the whole restructure has also been aimed at allowing the user community to be better able to navigate the wide range of SunGard products in a more structured fashion. “It gives our clients one face for SunGard,” he says. To this end, the vendor will continue to focus on integration this year, with organic growth as a key target for this work, although Scianna does not rule out further M&A activity.
He highlights the recent upsurge in interest within the industry in the post-trade space, which has resulted from regulatory and market infrastructure change, as a potential driver for growth over the course of 2011. In particular, he points to the move towards T+2 settlement in Europe, the growing importance of central clearing counterparties (CCPs) in the OTC world and the rising awareness of operational risk as a result of a regulatory push for greater transparency, as well as the post-Lehman focus on data standardisation. “The fall of Lehman highlighted the lack of standardisation in the legal entity identification and instrument identification space due to the challenges faced by financial institutions trying to determine their exposure and the time it took to track that data,” he says.
Scianna indicates that these market developments have compelled SunGard to focus on capturing all the transaction level data that reflects the regulatory reporting and risk management activity. The approach, he says, is not simply to provide a data warehouse, it is to formalise, standardise and clean up this data and provide it to downstream applications and business users in as close to real time as possible. This is all part of the work that has gone into the StreamCore solution, which therefore validates and normalises transactional, reference and market data from multiple sources within a centralised framework.
StreamCore is an operational data store, rather than a static database, and it provides symbology cross referencing between the data sets used within downstream systems, including hierarchical parent/child data. This year, the vendor will also be adding more functionality to StreamCore and improving its connectivity to other downstream applications through the addition of more application programming interfaces (APIs). “Due to the requirement to use multiple applications to cope with the market’s multi-asset class environment, there is unlikely to ever be one back office system used to process everything. This means that adding more APIs is vital to allow StreamCore to be as seamless and as quickly deployable as possible,” says Scianna.
The vendor will also be building more solutions on top of the StreamCore platform, in addition to current offerings such as Stream Credit Monitor, which allows firms manage credit across asset classes and counterparties, and Stream Fail Monitor, which allows for failure and exposure monitoring. One can therefore expect more of the solutions from the old brokerage and clearance business to be integrated with StreamCore this year to this end, particularly with regards to OTC asset capabilities, as well as the addition of more APIs.
Scianna points to the need to be “flexible and open” in this respect and the trend towards the software as a service (SaaS) deployment model across the industry as key developments in the market. Although not all back office solutions are suitable for an online front end, concedes Scianna, the development of multi-tenant architecture and online procurement is a popular combination to bring down operational costs via scalability for end users.
He is also watching the developments around the US Treasury’s Office of Financial Research (OFR) with interest, noting that the new agency should start with the lowest hanging fruit first. “Gathering data from market infrastructures and trading venues regarding transaction and instrument data is the obvious starting point,” he says. Scianna was, in fact, an original participant in the Committee to Establish the National Institute of Finance (NIF) – the precursor to the OFR – back in 2009.