With less than 30 days until the May 28 T+1 implementation for US markets, collaboration platform operator Symphony last week used the occasion of its annual Symphony Innovate event to highlight three innovations that promise to significantly accelerate the resolution of post-trade exceptions.
The new capabilities, which build on the company’s foundational secure communication platform, help streamline the post-trade process. Symphony Innovate featured demonstrations of each followed by a Q&A session with early adopters from Citi, UBS, Wells Fargo, and JP Morgan.
Exception management
The first solution was developed with DTCC, which has integrated Symphony into its Central Trade Matching user interface (CTM UI). This new functionality enables post-trade operations users to collaborate with their counterparties directly from the CTM UI. The CTM display now features an icon for trades indicating a settlement exception, which when clicked offers instant access to a Symphony chat room with the counterparty that’s pre-populated with trade data and exception details. These details will include Unique Trade Identifiers (UTI) in an upcoming release.
The integration uses the Symphony Operations Directory to automatically determine which internal and external groups should be part of the chat. The user doesn’t leave CTM, avoiding the need for context switching – such as dropping into an email or some other messaging platform, rekeying data, and potentially routing a query to the wrong counterparty.
Non-CTM users also benefit as they will see the conversation in their Symphony desktop or mobile application. Where firms have integrated Symphony into their case management tools, the conversation will appear there also. Symphony’s goal is to be able to link to any exception management tool.
Symphony and DTCC began working on this integration over two years ago. The solution has been operating in pilot mode with broker-dealers and buy-side firms, with positive feedback from the buy side in particular.
To address concerns among larger brokerage firms, about the possibility of being inundated with chat messages, Symphony developed a communications bridge into case management tools, which it also showcased at Symphony Innovate.
Case Management Interoperability
Many of the larger broker-dealers have made significant investments in integrating email into case management tools such as Salesforce to trap, monitor, and prioritise communications from internal and external groups. These firms tend not to use the CTM UI for exception resolution.
With the communications bridge, when a chat message arrives, a pre-populated case is automatically opened and assigned to the correct recipient. The recipient can resolve the case or escalate as necessary to internal and external groups. The client is automatically copied on these actions. This functionality ensures the correct people are fully informed on the status of the exception with no rekeying of data or context switching, all from a single point.
Operations Directory
The third solution showcased at Symphony Innovate was the Symphony Ops Directory, introduced in early 2023 in response to requests from SIFMA members. It allows firms to digitise and share their operations taxonomies both internally and externally with other participants, moving them away from manually maintained spreadsheets and SharePoint sites. One of the early adopters requested an additional feature be added that would escalate a new chat if there had been no activity or response within a specified period to ensure optimal client experience.
With the move to T+1, it will be important to get the right people involved in exception resolution as quickly as possible. When a new chat gets created, the escalation bot automatically joins the chat and waits for the designated period before escalation. The bot then uses the Ops Directory hierarchy to identify who the chat should be escalated to, vertically up through management and/or horizontally across the post-trade organization. It understands ‘presence’ – whether the recipient is online – and can use a follow-the-sun model.
Early Adopter Experiences
Citi, Wells Fargo, UBS, and JP Morgan are all global enterprises with hundreds of post-trade operations teams spread across multiple geographies, each covering different products and markets. There may be seven or more equity derivatives teams each covering the same product from different locations. This can make it difficult for clients and internal operations staff to navigate the organisation and find the right person to deal with a specific issue.
As one presenter put it, “In many cases, finding the right person (internally) can take longer than resolving the exception.”
In other cases, a Client Representative as a single point of contact can become a bottleneck for resolving time-critical issues. The Ops directory facilitates peer-to-peer communication between counterparty SMEs facilitating faster resolution time, eliminating the bottleneck while keeping client service reps informed.
For most of the firms, the initial step has been setting up the internal taxonomy. The next steps will focus on additional post-trade processes to minimize human intervention and reduce or eliminate email traffic.
In preparing for T+1, reducing the time to connect the right people to near zero is critical, particularly for firms covering US markets from other geographies.
Countdown to T+1
As May 28 approaches, the innovations showcased at Symphony Innovate 2024, particularly the collaboration between Symphony and DTCC, offer practical solutions for accelerating the exception management process and the window of opportunity for firms still struggling to meet the DTCC target rate of 90% SDA by the 9:00 pm ET cut-off, is rapidly running out.
The DTCC pilot has received positive feedback from broker-dealers and buy-side firms. Concerns raised by the larger broker-dealers over possible increased chat traffic have been addressed through the creation of a communications bridge between Symphony and case management systems. The result is a shortened exception resolution time with a significant reduction in email traffic and improved client service. The Ops Directory plays a pivotal role in enabling enhanced post-trade workflows.
As DTCC notes in its latest commentary on T+1 readiness firms unable to make T+1 deadlines run the risk of reputational damage and additional costs due to trade fails or the additional cost of settling trades via delivery orders.
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