Focusing on the Advancement of Technology
In the fast-paced world of capital markets, the importance of modernizing legacy trading infrastructure cannot be overstated. Deepak Dhayatker, CTO at Rapid Addition, has highlighted the high maintenance and support costs associated with these outdated systems, as well as their inability to meet today's client base and regulatory requirements.
Rodrigo Parrode, EVP and Chief Operating Officer at Wedbush Securities, agrees, stating that modernizing legacy platforms is not just about upgrading technology, but reshaping how value is delivered to clients. This modernization is essential for staying agile, scalable, and responsive in an increasingly complex market environment.
The best strategies for modernizing legacy trading infrastructure involve phased, risk-aware approaches. Deepak Dhayatker has discussed the 'straggler' pattern, replacing systems piecemeal over time. This method reduces the risk of client disruption and allows firms to gradually decommission legacy components.
Other key strategies include comprehensive assessment, agile, cloud-native architectures, strong risk management, talent and culture development, continuous integration/deployment (CI/CD), and stakeholder engagement. These strategies aim to minimize downtime and disruption, bridge skills gaps, ensure alignment across business and IT leadership, and implement automated testing and deployment pipelines for faster, safer releases.
The benefits for capital markets firms are substantial. Modernization can lead to cost reduction, operational efficiency, improved security, greater agility and innovation, better customer experience, and easier regulatory compliance. For instance, firms can achieve annual savings of €23M by eliminating maintenance and inefficiencies of outdated systems.
However, modernization comes with its own set of risks. These include project complexity and cost, technology risks, downtime and disruption, organizational resistance, and rollout and production risks. It is crucial to continuously assess and mitigate these risks, prioritizing zero downtime, especially for investment banks.
Despite the challenges, the rewards of modernizing legacy trading infrastructure far outweigh the risks. Done right, through phased migration, clear vision, and strong risk management, firms can future-proof their infrastructure, improve competitiveness, and foster innovation while minimizing disruption to critical trading operations.
Rapid Addition's recent whitepaper, Modernising at Scale: Re-Platforming Legacy Trading Infrastructure, provides a comprehensive guide on this topic. The paper emphasizes that even the most entrenched legacy platforms can be transformed to power the next generation of capital markets innovation.
For instance, Wedbush Securities recently advanced its trading infrastructure, enabling a streamlining of multi-asset class trading, risk management, and post-trade processes. This modernization has undoubtedly positioned the firm for success in the evolving capital markets landscape.
In conclusion, the modernization of legacy trading infrastructure is a necessity for capital markets firms. By adopting a phased, risk-aware approach, firms can reap the benefits of cost reduction, operational efficiency, improved security, greater agility and innovation, better customer experience, and easier regulatory compliance, while minimizing the risks associated with this transformation.
- Rodrigo Parrode, from Wedbush Securities, concurs, asserting that modernizing legacy platforms isn't merely about advances in technology, but rather about reinventing the way value is delivered to clients within the business and finance sector, which is essential for maintaining agility, scalability, and responsiveness in today's intricate market environment.
- Wedbush Securities' advancement in modernizing its trading infrastructure, as evidenced by their streamlining of multi-asset class trading, risk management, and post-trade processes, demonstrates the potential for improved competitiveness and innovation in the ever-evolving capital markets landscape, especially through technology and business events.
