Part 1: What the Infrastructure Needs to do
Trades and Products
Where do Trades Come From?
The Purpose of the Infrastructure
Part 2: The Problems with Trade Processing Infrastructure
The Evolution of Technical Complexity
The Regulatory Challenges
The Complexity Cycle
Part 3: Historic Approaches to Transformation
Functionalisation, aka “Factories”
The Golden Middle
Part 4: New Approaches to Infrastructure
Cloud and Utilities
Artificial Intelligence and Robotics
Big Data and Analytics
Blockchain/Distributed Ledger Technology
Distributed Ledger Technology: Hybrid Approach
Dealing with these issues relating to inconsistent data between risk and finance is not an easy task … the monumental legacy problems that many banks face have prevented them from rectifying this situation with the creation of a golden source through which all data is processed.
– Bank for International Settlements
Beware the man (generally a man) who claims to have the technical solutions to almost all the “big problems” of capital markets infrastructure, including how to clean up the general mess (without specifically cleaning anything up), how to bring the views of risk and finance about the balance sheet into alignment, and how to significantly cut costs.
The group of related approaches described in this chapter are described as the “golden middle”, a term invented by the author because so many different names (across so many banks) have been applied to this concept. Some of the ideas wrapped up in the idea of the golden middle make logical sense, even where they have practically failed. This chapter aims to help the reader learn from the mistakes of the past, to ask the right questions and to avoid being dazzled by the not always honest claims of past successes for