There is currently no single system offering sufficient processing capabilities for the full range of OTC derivatives. According to Towergroup, certain vanilla OTC derivatives products can be handled effectively with existing trading platforms, but processing hybrid derivatives in a standardised manner continues to challenge broker dealers.
“Due to the fast-moving nature of the OTC derivatives environment, the industry is seeing increased spending on technology, as well as increased pressure on technology firms to keep up with derivatives innovation. The successful management of these challenges will enable broker-dealers to reap the rewards associated with this high-growth, high-margin derivatives business,” said Stephen Bruel, analyst in the securities and capital markets practice at Towergroup.
The week on Risk.net, November 17–24, 2017Receive this by email