Out of the financial crisis came a common consensus that agreed capital markets must exist in a more tightly controlled risk management environment, if only to avert the calamitous events of the recent past. With this school of thought has emerged a sharper focus on innovation and technology in bringing changes to the industry. Only by incorporating the latest technological advances and partnering with capable enterprise software providers will leading industry figures acclimatise to always-complex and often-disruptive changes to the financial services sector.
Of the firms to have assisted the financial services sector in meeting more stringent risk management controls, there are perhaps none more capable than World Finance’s 2014 Best Risk Management Systems Provider award winner and enterprise software provider Murex, whose contribution to the transformation of capital markets recently is second-to-none. “Murex has been the leading provider of cross-asset trading, risk management and processing solutions for the financial industry since its creation in 1986”, according to the company’s Chief Marketing Officer, Stella Clarke. “Murex has played a key role in proposing effective technology as a catalyst for growth and innovation in capital markets.”
The key to success in providing capital markets solutions is not simply investment and customer centricity, but a focus on key structural changes in the industry
Headquartered in Paris, the firm boasts as many as 17 offices worldwide, a staff of 2,000 specialists and has stayed the course in committing a huge chunk of its income to R&D. Over the past three decades, the firm has abided by two central pillars – innovation and customer partnership. By always enhancing its technological experience and expertise, Murex’s reputation in the industry is solid. Not only that, but in treating each partnership as a shared journey, the company is seen the world over as a trusted advisor and an enabler of growth and transformation. The firm strives to attract top talent and to maintain a solid culture of financial and technological expertise, and, in realising these goals, looks to IT as a major driver.
Historically speaking, IT is a less-publicised aspect of financial services, yet leading industry names have realised that without the latest technologies, they will likely fall short of the competition or response to market changes. The importance of enterprise software in capital markets therefore mustn’t be underestimated, and choosing the right platform can often make the difference between financial success to out-and-out failure.
Innovative platform technology
Understanding this to be the case, Murex has embarked upon one of the most impressive R&D programmes in the industry in a bid to bring a powerful and flexible technology platform to market. “Driven by innovation, Murex’s MX.3 Front-to-Back-to-Risk platform leverages the firm’s collective experience and expertise, accumulated through its strategic customers partnerships, to offer an unrivalled asset class coverage and best-of-breed business solutions at every step of the financial trade lifecycle”, says Clarke. “Customers worldwide benefit from the MX.3 platform’s modular set of business solutions, specifically designed to solve the multi-faceted challenges of a transforming financial industry.”
Innovation is at the very core of Murex’s strategy, and nowhere else was this clearer than with the launch of MX.3 platform. Murex became the first company to introduce the concept of an integrated technology across trading, risk and back-office functions in the late 1990s, marking the first step on the road to releasing the now-iconic MX.3 platform in the mid-2000s. Pioneering again, the company has been adding flexible business solutions to the platform, shifting towards a more service-oriented architecture (SOA).
“Since the 2008 financial crisis, Murex has enabled the transformation of the capital markets at large global institutions”, says Clarke. “In a world where trading and risk management analytics need to be real-time and consistent, Murex has been able to deploy at a controlled cost, integrated solutions that answer the regulatory requirements from pre-trade to post-trade.”
However, providing expertise at every step of the value chain is redundant without first understanding what it is customers require. “Murex has a customer-centric strategy based on long-term partnerships and proven by very high client retention rates over the years”, says Clarke. “One of the key strengths of Murex is its ability to support its customers beyond the initial implementation and allow them to benefit from regular innovation in terms of technology and functionality.”
The importance of customer experience is becoming key in developing effective capital market solutions, and Murex believes any user requires intuitive interfaces and app-like functionality, and is committed to deliver them. Any enterprise software platform, therefore, needs to be mobile and cross-platform enabled, in order to successfully negotiate the current technological shift in financial services.
With a proven track record in supporting customers from global money centres to local banks, large asset managers to medium-sized hedge funds, and large corporations to energy utilities, MX.3 has made a name for itself as an industry platform. “Murex services a wide range of investment banks: from large, global players that look to Murex in rationalising their trading, risk and processing infrastructure, to regional and local players looking to develop their capital markets business in the market. Murex has also an offering for the buy-side and works with large institutional asset managers across the world”, adds Clarke. Boasting a user base of more than 40,000, the success of the platform is such that trading, hedging, funding, risk management or processing operations are more manageable and successful for thousands across the globe.
Riding industry challenges
The key to success in providing capital markets solutions is not simply investment and customer centricity, but a focus on key structural changes in the industry. Without first partnering with a successful enterprise software provider, those in the financial services sector will come up against un-scalable hurdles and fail to acclimatise to an ever-changing market.
For example, big data is taking over the trading world, and requires the very best in business intelligence if those in the industry are to make real-time and complex decisions. State-of-the-art aggregation and visualisation tools are in demand, and companies like Murex must marry enterprise-level non-functional requirements with the best in analytics.
The sheer amount of data spiralling about capital markets is not a problem in itself, rather it is the ability to understand this information for instant decision making. The importance of solutions such as Murex’s MX.3 platform, therefore, mustn’t be underestimated, as firms look to process and apply wave upon wave of data in a bid to improve their understanding of capital markets and the various processes associated with it.
According to Marwan Khalil, Head of Core Technology at Murex: “10 years ago in 2005, a system achieving 10 trades per second with a position keeping frequency of one second was deemed best of breed. Today, to qualify for best of breed requires the capability to process 10,000 trades per second, with five millisecond positions keeping latency. In the not so distant future, the trend will continue, with a target of 100,000 trades per second with sub-millisecond position keeping latency. Smart use of new technology allows our customers to achieve faster response time.”
He continues, “For example, the use of GPU instead of CPU or in-memory grids allows never seen before performance at a fraction of cost and near linear scalability.” However, the challenges facing enterprise software providers ask that their solutions deliver fast and high-quality software evolution. “Introducing constant testing, agile development and technological innovations in its software factory has been a crucial part of the company’s response.”
“The next big frontier is for investment banks and their capital markets business to move to the cloud”, says Clarke. “Opinions vary on the speed at which the shift will occur. Traditionally capital markets have been highly secretive and demonstrated a marked preference for owned infrastructure, and Murex believes a move to private clouds is around the corner, which is why the firm is working to enable the MX.3 platform with enterprise-cloud providers.”
The success of Murex is due largely to a company decision to invest such sums in R&D and technology; two factors that the firm has rightly recognised as key points of differentiation between it and others in the enterprise software provider market. True industry vision, an advanced platform and high quality service are distinctive qualities, though these qualities would scarcely be achievable without high levels of investment. Due to the steep financial costs of entry, the market is dominated by enterprise-level technology providers – as opposed to start-ups – yet a commitment to innovation is still very much present among even the market’s biggest names.