[ M A R K E T
R E V I E W
|
F O R E I G N
Richard de Roos, head of FX
at Standard Bank, believes his
‘modular’ approach to updating
legacy systems has paid off. He
explains it can be difficult for large
sell-side firms to buy off-the-shelf,
new systems as they could very
well be considered legacy within
six months.
“It’s difficult for legacy systems to
hold big data and analytics, and
provide accurate information.”
MPUMI MAKHUBU, MANAGER, EFX,
PRODUCT, STANDARD BANK
“What we try to do is have
legacy systems in place that are
newer than other systems. It’s not
proprietary, it’s from a vendor that
provides regular updates on an
aggregated basis to ensure we are
best of breed in most cases,” Roos
explains. “On top of that, we are
very aware that we do not know
where the technology evolution
is heading. We need the agility to
make sure we aren’t backed into
a corner and buy a system that
becomes ‘old-school’ legacy in six
months’ time.
“With that approach we are
switching the costs in terms of
moving from one vendor to anoth-
er on a modular basis, rather than
approaching one vendor with all of
our system requirements. That has
really paid off for the FX business
at Standard Bank.”
Roos adds that systems are
regularly and rigorously checked
as part of a review process ap-
proximately every six months to
ensure the FX business at Standard
Bank has sufficient agility in the
way it is set up to make changes
if necessary. The trick for large
FX institutions, he concludes, is
making everything modular and
60 // TheTrade // Summer 2018
E X C H A N G E ]
API applicable, without breaking
stability - but this has its own risks.
“The other side of the argument
is that if you are too modular and
you have the need for low latency,
it can have the opposite affect and
cause instability,” Roos says. “It’s
difficult and there are risks, but
banks need to evolve and remain
wise about the decisions they make
rather than being impressionable
to stay ahead of the game.”
Other banks have taken a slightly
different approach to legacy
system upgrades. In February last
year, for example, Crédit Agricole
Corporate & Investment Bank
(CIB) decided to replace its legacy
systems for FX trading through
a partnership with Orchestrade
Financial Systems. All front-to-
middle office processing of vanilla
and structured products from two
legacy platforms were overhauled
and migrated to Orchestrade’s
platform.
Global head of the trading divi-
sion at Crédit Agricole CIB, Thom-
as Spitz, said at the time that the
overhaul meant the business was
able to improve risk performance,
keep up with new regulatory
changes and reduce costs. Post im-
plementation, Orchestrade added
that the bank has seen improved
efficiency alongside one consistent
platform used by the sales, trading,
risk and operations teams.
Connectivity and liquidity
Achieving low latency connectivity
to various global FX venues and
the data that those connections
accumulate remains one of the
biggest challenges for large FX
firms. Alina Karpichenko, global
marketing manager at IT infra-
structure provider Avelacom, says
the vendor works with a number
of institutional trading firms and
is seeing an increased demand for