by Justin Meadows, Founder and Chief Executive, MyTreasury
When MMF trading portals were first implemented in the early 2000s they were typically single product, stand-alone systems delivering basic market discovery, trading and reporting capabilities. Since then the vision of electronic trading has developed into one of multi-asset class portals providing access to a broad range of instruments across different markets. The need for this is now widely accepted and MyTreasury is already offering a significant range of products in addition to MMFs and actively working to bring more on board. So it’s no longer a question of whether the end for dedicated MMF platforms is in sight, it’s simply a question of how quickly they disappear altogether from the treasury trading landscape.
The continuous revolution is now spreading more widely than just adding extra asset classes, and the focus is shifting onto the implementation of a fully integrated and automated treasury trading infrastructure. When this has been implemented a single click is all that’s required to optimise, execute, book, settle and report all treasury trading activities within the framework of local and global treasury policies. Whilst there has been an emerging understanding of just how powerful an integrated electronic trading set-up might be, this has not yet been reflected in its widespread implementation. But the continuing pressures on treasurers to deliver greater operational efficiency and effectiveness with reduced budgets is leading inevitably to the broader adoption of technology solutions and increased efforts to join these up into a fully integrated treasury trading infrastructure.
As with most large-scale technology implementations it is usually better to build the required infrastructure in stages rather than to attempt a ‘big bang’ approach with all its associated risks. The structuring and sequencing of this will of course vary from one organisation to another but it’s possible to identify five basic stages that will be required to achieve a comprehensive integration.
Stage 1 – The trading platform
The core of an integrated trading infrastructure is of course the trading platform itself and this is where most organisations start. To the casual observer the main trading platforms may appear to be very similar with only marginal, cosmetic differences between them. However, the reality is that there are fundamental differences in most cases, not only in terms of their underlying business models and risk metrics but also in their suitability to form the core of an integrated trading infrastructure. Not only must the platform be technically capable of being integrated with the other key elements of the infrastructure but it must also be capable of providing the required information to these other elements as well as being able to receive and use the information provided by them.