In Praise of Standardisation

April 14, 2022
Umesh Patel
Tech4Fin

As a concept, “standardisation” doesn’t sound as exhilarating as “innovation” or “disruption.” But practically speaking, standardisation is a critical underpinning of progress and growth. Standardisation is why you can plug any appliance or device made by any manufacturer into any wall socket (at least, within a given country). And it’s why the variety of apps you download function on your smartphone, regardless of who developed them.

When it comes to technology driving the evolution of financial services workflows, standardisation has not been a high priority. The sooner financial institutions and software developers adopt some standard protocols, the sooner we can connect processes to all users to more seamlessly and efficiently create dynamic and custom workflows.

Digitisation + specialisation = fragmentation

Historically, digitisation of financial services workflows meant building large-scale, linear platforms like Murex, Bloomberg, and Fidessa that supported all necessary processes within key workflows – such as combining liquidity aggregation, pricing, portfolio management, and risk exposure mapping into one system. But more recently, niche firms are emerging that specialise in individual workflow components. A financial institution might consume risk management services from one platform, OMS from another, and news and analytics from a third.

This fragmentation of workflows creates three challenges:

Connecting processes together
Providing access to workflows where users want it
Standardising data for ease of transfer

The Symphony platform provides solutions for the first challenge by way of our open APIs, such as BOTs and EXT apps, and our recent adoption of the FDC3 standard. For instance, the Quant Insight and FinTech Studios integrations, showcased at our recent Innovate conference, show these assets in action. The second challenge will be addressed by our soon-to-be launched Embedded Collaboration Platform, allowing Symphony to be embedded into third party applications, as well as our new Secure Event Service API, allowing for workflow to be delivered directly to two counterparties working from a third party platform, all while maintaining security and compliance.

But when it comes to the third challenge, each of these disparate platforms use their own proprietary blend of data formats and programming languages, making it difficult to connect them into streamlined workflows.

In order to enable these fragmented processes to function within workflows, the industry needs to standardise the data flowing from one platform to another, beyond just the format. And as more and more niche platforms come to market, this need for standardisation will increase.

But when it comes to the third challenge, each of these disparate platforms use their own proprietary blend of data formats and programming languages, making it difficult to connect them into streamlined workflows.

In order to enable these fragmented processes to function within workflows, the industry needs to standardize the data flowing from one platform to another, beyond just the format. And as more and more niche platforms come to market, this need for standardisation will increase.

Standardisation requires a mindset shift

For financial services platforms to embrace standardisation, firms need to shift away from the mindset that their data structure must be 100% proprietary. A lack of common standards was not a problem when there was no need for data to flow between platforms, and each financial institution could configure their workflows on a single, linear platform. However, as firms seek out best-of-breed solutions for niche components of their workflows, their data needs to flow seamlessly through those processes. However, without establishing common standards for how data is formatted and transfered, the industry is limiting the degree to which workflows can be customised and optimised.

This standardisation allows clients, developers and even individual users to create unique workflows with the constant ability to change processes seamlessly with no external support. The power to connect workflows while retaining the flexibility to make them custom is what will enable firms to be more dynamic and responsive in an ever evolving landscape.

As we look to develop this standardisation in the platform, we are looking to engage with the financial services industry to identify use-cases and workflows where the standardisation would be beneficial. If you are interested in getting involved, please reach out to your Symphony representative.

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