abstract
Reducing interconnection channels can reduce IT burden, release resources and improve the performance of transaction infrastructure. Most importantly, it can help brokers provide competitive differentiated services.
A new way for commission merchants to control costs and risks. SteveWoodyatt is the CEO and chairman of ObjectTrading. He believes that the reduction of IT interconnection channels between brokers and exchanges can improve the overall business performance of commission merchants. For brokers, integrating IT connection channels with exchanges can make their connection with exchanges faster and cheaper. In many cases, for the whole sales side, the IT team needs continuous efforts to keep the system running normally. In the fierce market competition environment, brokers are looking for ways to control costs and risks. Many brokers find that their current infrastructure is too complicated, which makes them encounter unnecessary troubles in risk management. Some companies have successfully simplified the communication channels with exchanges, which enables them to avoid redundant procedures, reduce unnecessary expenses and better control risks. Steve also put forward eight reasons for simplification:
Reduce the pressure on employees
Brokerage companies are seeking innovative ways to control costs, optimize performance and maintain integrity and stability. Evaluating the number of systems in a company is a good start to achieve this goal. Integrating technical channels and reducing the number to a controllable number can significantly reduce costs, release employees, give full play to the subjective initiative of IT employees, carry out technological innovation business, meet customer needs, and focus on innovative areas that support business development, which is conducive to attracting new customers and redeveloping existing customers.
Don't try to describe the Brooklyn Bridge.
Many brokers are developing their own internal gateway systems. The technical department thinks that this can make them more competitive, but in most cases it can't achieve the effect. In fact, this complicated method is like painting the Brooklyn Bridge-because this arduous task is very time-consuming, it is very likely that the paint will start to fall off at the beginning of the bridge before you finish painting. Maintaining such a complex system is an endless task. Similarly, internal managers may think that establishing their own gateway system will play an important role in internal competitiveness. However, the reality is that the investment of time and energy required by this method will involve high cost, which will make it difficult to manage.
Liberate technical resources
If the IT team of the brokerage company has been in a state of daily maintenance before the change, it will be a qualitative change to start focusing on innovation. This will give employees more time to focus on the customer experience plan and better meet the needs of customers. When the trading needs of customers are met, the trading potential of existing customers will be released, thus creating more income for brokers.
Improve performance, integrity and stability
Complex and unclear infrastructure will affect the performance of the whole system, increasing delay and unpredictability. Complex infrastructure and repetitive exchange interconnection system will reduce the efficiency of the system and greatly increase the possibility of mistakes. Traders may have to constantly change trading platforms. The interruption of trading may shake the confidence of customers, affect the short-term and long-term turnover of brokerage companies, and may lead customers to leave. In the current competitive environment, for brokers, providing customers with simple trading channels can win the trust and dependence of customers.
Reduce costly mistakes
Reducing mistakes has always been an important goal of brokers. Because the occurrence of unexpected mistakes will lead to the loss of real money for enterprises. In fact, an unexpected mistake may lead to a quarter or even a year's profit being wasted. So it also shows the importance of daily system maintenance, and the maintenance of each system is accompanied by a huge budget. Therefore, simplifying the system and doing a good job in maintaining the number of systems can fundamentally reduce the probability of trading accidents and avoid paying a high price for mistakes.
Gain a competitive advantage
A brokerage company mainly attracts customers from the following aspects: smooth process, clear and accurate industry management, reliable performance and so on. At present, low delay alone is not enough to attract customers, and investors hope that brokers can provide simple connection and trading channels. They want to be reliable, trouble-free and mobile. These requirements of investors have pushed brokers to the road of technical optimization. At present, brokers are under pressure to reduce costs and improve their pre-transaction risk management capabilities. Some brokers began to integrate their interconnection channels with exchanges, closed unnecessary channels and focused on maintaining important channels. In this way, they have achieved the goal of reducing costs, and at the same time, they can improve their risk management ability and gain a competitive advantage.
Reduce the connection cost with the switch.
Usually, brokers rely on gateways from different suppliers to access exchanges, and they also use a large number of interfaces to connect various front-end trading systems and middle-and back-office applications. When a link has new changes, each connection point needs to be updated, which will push up the maintenance cost and increase the IT budget. Most exchanges will have a lot of technical updates within one year, which also leads to the update of each system of each brokerage, which makes the maintenance cost increase rapidly, and these costs are usually sudden. Every update and test involves the upstream trading platform and the downstream risk management platform, settlement and back-office system. If the exchange corresponding to the brokerage company needs to be updated several times every year, then the brokerage company needs to be updated several times, and each update needs to be played, which is not only inefficient, but also costly.
In addition, each link needs servers, hosting space, and telecom operators, and API interface fees are incurred. Therefore, the more connection channels each broker has with multiple exchanges, the greater the cost. In fact, by eliminating redundant internal and external gateway systems and replacing them with a more integrated channel, a lot of financial resources can be saved. For these reasons, brokers not only reduced the number of gateways accessing the market, but also tried to connect all upstream and downstream systems with the same API interface. This method can reduce the overall maintenance cost and prevent management redundancy. In addition, simpler paragraphs can save a lot of time and manpower.
Improve the efficiency of risk control before trading.
Most brokerage companies rely on the trading system of exchanges or suppliers for pre-trading risk control. This seemingly simple method brings unnecessary complexity. The risk control method of each supplier's trading system is different. Most systems provide risk information in a proprietary format, so it is not easy to merge risk information from different systems. As a result, brokers cannot integrate all the risk information and obtain the overall risk situation of customers in different markets and different asset classes. In order to solve this problem, some companies have introduced technology gateway solutions, which are based on open interfaces and can be managed conveniently no matter how many front-end trading systems there are. This scheme can also expose risks in real time and solve problems before they become complicated.
(This article was compiled from www.fow.com)