For the last few decades, from the early days of Gordon Gekko and Liar’s Poker to today’s focus on hedge funds and high frequency trading, the sex appeal has clearly centered around the front office. The press loves to write about it and we love to read about it. Every trade is like the proverbial iceberg, though — the trading decision is what everyone sees, but the majority of work happens in the murky waters below the surface where the considerably less sexy mid-and-back-office operations occur.
Last week Greg MacSweeney wrote a good article in Wall Street and Technology highlighting the back office as a new battleground for efficiency. After years of chasing zero latency for the front-office, the back office is comparatively archaic and badly in need of updating.
Greg predicts that 2010 will be the year the back office gets some love, and his analysis is spot on. Electronic trading has accelerated the rate of initiating trades so much that most mid- and back-office systems struggle to assess risk and execute trades before someone else gets there first. The mid and back office have to keep up with risk and make sure trade execution and settlement don’t experience bottlenecks or disruptions. But you can’t just apply front-office advances to the frumpier back office. If the front office is (mostly) about latency, the mid and back office are primarily about cost-effective, predictable and reliable behavior.
In financial services the cornerstone technology for making information flow is messaging middleware, and for front-to-back messaging, Solace’s answer is its Unified Messaging Platform (UMP). Solace’s UMP gives you one API that is best-of-breed for performance, reliability and operational simplicity across the front, middle and back office. It’s proven with big investment banks, financial information providers, hedge funds, high frequency trading shops and exchanges. I’m not talking about the future either, over half the companies we’re working with today look to us for mid and back office advantage in addition to speeding up the front office. Consolidating these traditionally segregated environments is changing the game in terms of value delivered for our customers.
With apologies to Justin Timberlake, we’re bringing sexy (to the) back (office)!