As we reflect on the past two years, the pandemic has accelerated the industry’s digital transformation as managers continue to seek efficient, scalable solutions. In our ongoing discussions with clients during this time, new areas of concern and opportunity have emerged with trade order management systems (OMSs) gaining traction as a way to transform their trading process and make it – as well as their organization – truly future proof.
However, traditional OMSs are extremely limited when it comes to supporting complex, exotic asset classes and lack the scalability to natively cater to such asset classes in the future. On top of this, the trade capture process is frequently managed manually in Excel spreadsheets, which are highly error-prone and fraught with operational inefficiencies and risk. As a result, managers often endure high implementation complexity and costs.
Additional pain points of traditional OMSs include:
- Lack of customizable trade allocation and compliance engines to support varied and complex allocation methodologies and compliance rules
- Inability to model hypothetical trades/scenarios to understand potential impact on compliance, performance, etc.
- Lack of configurable multi-level approval processes and workflows
In order to have a seamless trade order management process and alleviate these challenges, managers must seek a fully configurable and light weight system that’s designed to increase both efficiency and control through the power of automation. State-of-the-art OMSs possess the capability to natively support any complex asset class and capture all relevant trade details to help eliminate operational risk in the trade capture process. With built-in workflows, these systems provide managers with a detailed audit trail for each user action, thus instilling confidence in the trading process and reducing the risk of human error.
Current leading OMSs also allow users to design their own trade tickets to help ensure they capture all trade details in their truest form. These systems tend to have built-in automated connectivity to incoming fills via VCON, AIM, FIX, etc., as well as to prime brokers, admins, counterparties and matching systems for trade reporting. Furthermore, they are often supported by n-level configurable allocation, compliance, and approval and verification workflows.
IVP OMS, our state-of-the-art order management system, is a truly scalable and self-serviceable system that allows users to quickly start supporting any new exotic asset class and is particularly well suited to the world of illiquid, OTC, tradable credit, private credit, senior loans, direct lending, loan origination, real estate, CLO management trades and deals. Moreover, its implementation, maintenance complexity and cost are also a fraction of what it takes for a traditional OMS.
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