Transforming post-trade matching as SWIFT retires Accord

So, how is your firm’s Accord migration programme shaping up? Is it on course or ahead of schedule? Or does it require some initial impetus in the early stages of planning? Either way, this required change brings with it an opportunity to re-examine your efficiency levels and review your overall matching strategy. It has now …

by | February 8, 2016 | Broadridge Financial Solutions

So, how is your firm’s Accord migration programme shaping up? Is it on course or ahead of schedule? Or does it require some initial impetus in the early stages of planning? Either way, this required change brings with it an opportunity to re-examine your efficiency levels and review your overall matching strategy.

It has now been more than a year since SWIFT announced the long-term decision to retire its trade confirmation matching solution, Accord. Firms using Accord have a requirement to plan and execute upon their transition strategy, as they will need a replacement by October 31st, 2017.

While some firms were quick off the mark to assemble their migration team and kick-start their transition planning, many others have been less hurried, perhaps unsurprising given the magnitude of regulatory and market changes that financial firms are facing.

However, while late 2017 may still feel like a distant horizon, many firms have noticeably switched gears and now have their transition plans in sharp focus. And those firms that were fast out of the blocks now have the peace of mind that their migration project is suitably resourced and advancing, or even fully deployed in a live operation.

Accord migration – the opportunity that comes with change

Clearly SWIFT’s Accord has stood the test of time, both in terms of its longevity and its sizeable international user community – a de facto market standard based on a shared service model. But change leads to opportunity, and the rightful expectation that any solution change should deliver additional business value beyond a like-for-like replacement.

So what are these additional benefits, and why the hurry?

Firstly, the advantages of a prompt conversion should not be underestimated, and as the deadline draws closer, the available pool of untapped migration and implementation resources will undoubtedly diminish given the magnitude of Accord’s user base. So, the early mover can mitigate transition risk. A further advantage of timely conversion is that the firm may be better placed to adapt to regulatory change, such as the increased pressure to conduct timely confirmations as driven by regulations such as EMIR.

Then there is the underlying operational capability of your target replacement solution, and as I mentioned above, firms should set their sights beyond a pure like-for-like replacement – this is a real opportunity to assess new areas of value to support your matching strategy.  So target a full replacement that covers all of your business requirements and those of your clients, and then make an assessment of additional requirements that would propel your firm to a best-in-class model. Some self-assessment questions may help formulate your considerations for a target model, for example:

  • How can the solution further enhance our efficiency and risk controls?
  • How can the client experience be transformed through an online service?
  • To what extent can a solutions supplier commit to a programme of ongoing investment to meet our future needs?
  • Is there an opportunity to automate confirmation processing for all sources, including those presently conducted on a manual basis?
  • Is there a way to profile and better manage the risk associated with unmatched confirmations?
  • Can my future solution support derivatives trades?
  • Will I be able to realise an improved standard of operational control?
  • What is our preferred supplier’s state of readiness for the new Confirmation Copy service?
  • How will I replace the Accord long-term archive?
  • What is the best deployment model for my business?

Transitioning from Accord need not be onerous; it can be achieved without disruption to day-to-day business, and presents an opportunity to reassess your matching strategy. But with October 2017 approaching, now is the time to commence your project planning, if you haven’t yet done so.

By John Bevil, Solutions Manager, Global Technology & Operations, Broadridge Financial Solutions.

Transforming post-trade matching as SWIFT retires Accord

 

 

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