Client: A leading U.S. investment banking and financial advisory company
Industry: Financial Services
Business need addressed: A high volume of inter-company trade breaks between multiple systems, between third party clients, and within multiple books, resulting in higher capital charges, multiple audit gaps and restricted trade volumes
Genpact solution: Genpact redesigned the end-to-end process for equity derivatives processing, identified the root causes of the breaks, and provided recommendations for improving the STP (straight through processing) of trades by 25%
- Growth and scalability
- Adaptation and flexibility
- Standardization and simplification
- Reduced cost and margin pressure
One of the world’s leading investment banking and financial advisory firms was struggling with an unacceptably high number of trade breaks, along with an inefficient resolution process within its equity derivatives business. Certain aspects of the business, such as inter-company service fees and back-to-back trades were causing position, price, cash, and dividend breaks between internal trading systems, other business groups, and third party clients. The firm wanted a partner with domain expertise to help it identify and eliminate the root cause of the trade breaks, and to improve the resolution process.
Genpact identified several key problems by analyzing the existing trade capture and processing of equity derivatives trading.
- Critical information was not captured up front in the trade booking process
- Trade amendments and updates were not captured in a timely manner
- The documentation and confirmation process was constrained by a lack of automation
- Inefficient and multiple reconciliation platforms were in use across the business
- The existing trade date reconciliation process was inadequate
- A lack of cross-functional communication and transparency existed with regard to trade breaks
The Genpact approach
Genpact redesigned the end-to-end process to eliminate the root cause of the trade breaks and improve the resolution process.
- Mapped new functions within the affirmations and middle office departments to improve Straight Through Processing (STP)
- Created transparency in ownership of breaks and captured relevant information for all hand-offs
- Developed process enhancements in trade capture, documentation, confirmation, and reconciliation functions
- Instituted leading metrics, including a trade break status report
- Identified standardization and business process management opportunities across all processes in scope, leading to increased
Business impact delivered
- Genpact helped the client design and implement two new processes and identified 55 actions, as part of a solution that reduced trade breaks by 25%.
- By using Genpact’s domain expertise, the client streamlined equity derivatives processing, enabling continued growth.