In Praise of Standardisation

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:

  1. Connecting processes together
  2. Providing access to workflows where users want it
  3. 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.

You may also like

Tech4Fin

A Communication Transformation: Broader Access to Voice

More than ever before, business success depends upon an organization’s ability to communicate quickly and effectively. It’s clear that the “workplace” has radically changed. This new landscape demands three things from every company’s communication tools:

Tech4Fin

Accelerating transaction settlement demands a fresh approach to communication

In December of 2021, SIFMA, ICI and DTCC called for the shortening of the settlement cycle in the U.S. financial markets from T+2 (transaction date plus two days) to T+1 (transaction date plus one day) within the first half of 2024. Their report indicates that accelerating the settlement process will “reduce risks and costs for the industry while building upon the benefits achieved in the successful move to T+2 in 2017.” This is in line with the Securities and Exchange Commission’s announcement on Feb 9, 2022 of a proposed rule to shorten the standard settlement cycle for most broker-dealer transactions from two business days after the trade date (“T+2″) to one business day after the trade date (“T+1″), while soliciting comments regarding challenges and possible approaches to achieving settlement by the end of trade date (“T+0″).

Tech4Fin

Carrying over history to the mesh

In our journey building an event mesh, we face the challenge of reconciling with Symphony’s engineering history. Specifically, we are transitioning from a single-tenant, monolithic architecture to a multi-tenant, microservice architecture. And critically, due to the nature of our business, this shift must be both progressive and smooth.