Historically, the technology and processes to support manual data reconciliations have been very much geared towards addressing challenges around sharing the data, looking at the data and then using very linear technologies over the top. But a series of trades doesn’t simply add up to a position. It’s a very simple statement, but an important one.

This is compounded by a couple factors -the increase in transaction volumes and more complex assets being transacted. This is leading to frequent errors (due to different systems and non-linear processes) resulting in a costly mess of point-to-point reconciliations and mistakes.

We really need a very different approach than the one that exists now. One long-term solution to this is tokenisation and digitisation, where everyone is looking at the same record. But even then, that’s not enough on its own. The optimum state is having the ability to make a summation of those records by using non-linear enabled technologies which can be aligned to clear business processes.

How can new data management technologies help reduce operating costs?

It’s important to note how new data management technologies can not only reduce operating costs, but also reduce risk. This means individuals can be granted permission to access only the specific data they need therefore ensuring compliance with market data licensing and regulatory obligations while being authorised to perform the right action. Therefore, creating a safer environment: people can then see the bits of the puzzle they need for their specific role, without necessarily seeing all of it.

Again, the issue with the push towards tokenisation and digitisation, means a lot of the public blockchains have access to everything. So that’s not quite the right solution. It’s about finding the balance which reduces duplication, synchronisation issues, translation problems, and breaks, while maintaining the controls required for financial services.

What is the key driver behind the push for real-time data sharing?

It’s largely driven by the increased sophistication of the ultimate capital allocators. If you look at sovereign wealth funds and pension funds, as a macro trend, they’re starting to insource more of their own risk management. In order to do that, they need to look at the same data.

So, they’re starting to ask their managers and their custodians and administrators for data that’s at the same time point. When quick decisions are necessary, relying on data that’s 90 days old here, 30 days old there, or even just a few days outdated can hinder the process. The goal is to have all relevant information in real time to enable better, more informed decisions on a macro level. We’ve seen that trend an awful lot more where the end capital owners are becoming much more sophisticated in their approach.

What are the main pressure points for asset managers when it comes to their operating models?

There’s a change in the asset mix with the end allocators wanting both public and private assets. There is also a change in the demand for data with asset managers wanting all their data in real-time. For allocators, fee compression is a significant concern. As more machine learning, AI, and automation are introduced, they may ask, “Why should I pay 1.5% or 2% in fees when I could be paying just 0.5%?” Additionally, with interest rates staying relatively high, investors may question, “Why take on risk to earn 7% when I can get 5% or 6% from government bonds – and avoid paying you a 2% fee?”

This combination of factors has created a perfect storm: capital flight from traditional managers, pressure to lower fees when they do secure capital, and an increased demand for complex asset mixes. All of this contributes to a significant challenge for the profitability of asset managers.

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Chris Stoate

FINBOURNE’s dashboards and an open API environment will help TT International professionals to unlock data held within existing systems, and quickly surface and centralise reconciled data for application across operations, according to the firm.

“With over 30 years’ experience in high alpha specialist investing, we recognise that transformation, driven by clean, high-quality data, is vital to our continued success and future growth,” said Chris Stoate, head of risk, operations and technology at TT International.

“Implementing FINBOURNE’s technology underscores our commitment to delivering exceptional client service, streamlined integration and access to real-time and quality data to support our goals.”

Through the development and the corresponding data integration, enhanced real-time insights, and improved processes, TT International will be able to make better investment decisions alongside transforming its operating model.

Read more: FINBOURNE Technology increases funding total to over £100 million

“Asset managers are increasingly seeking technology that enhances efficiency, transparency and decision-making capabilities,” said Thomas McHugh, chief executive and co-founder at FINBOURNE Technology.

“We are delighted to support TT International to deliver unparalleled client service by providing the flexibility to innovate and scale to their strategic plan.”

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Thomas McHugh

The secondary funding round brings the total to over £100 million, making it one of the largest series B raises in the UK.

The development has enabled six investors to follow-on from their original investment and four additional investors to join the group of firms with a stake in FINBOURNE.

CommerzVentures and HSBC will join the FINBOURNE Board as observers.

FINBOURNE provides investment management solutions and a cloud-native data management platform.

Across the investment lifecycle, investment and operations teams can increase revenue, reduce costs and better manage risk, the firm claims.

“I am encouraged that FINBOURNE’s best-in-class SaaS solutions, top-tier clients from across the financial services industry and high-growth go-to-market strategies continue to prove attractive for investors,” said Thomas McHugh, chief executive and co-founder at FINBOURNE Technology.

“We are looking forward to working with our new partners as we significantly expand our client base as firms transform their businesses to make trusted and consolidated data core to better and faster decision making across the front-, middle- and back-office.”

Santander Corporate and Investment Banking (Santander CIB) acted as the exclusive financial advisor to FINBOURNE in this transaction.

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The move follows a Series A finding round of £15 million in 2021, with this latest investment set to fund the firm’s commercial development, including expanding its sales, product and marketing capabilities in the US, UK, Ireland, Singapore and Australia.

FINBOURNE is a provider of investment management solutions and a cloud-native data management platform.

According to the firm, its functionality can be utilised across the investment lifecycle, investment and operations teams to increase revenue, reduce costs and better manage risk.

Over the past year, FINBOURNE has secured new clients across global investment management, banking and capital markets which it serves including Northern Trust, Omba Advisory and the Pension Insurance Corporation (PIC).

“This funding round and support from top-tier investors will help us deliver our enhanced go-to-market strategies,” said Thomas McHugh, chief executive and co-founder of FINBOURNE Technology.

He added: “By significantly investing in go-to-market initiatives across our key segments, we can help even more global investment management, banking, and capital markets firms access and utilise a trusted and consolidated view of their financial data across the front, middle and back office.”

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Taskize allows organisations to manage their post-trade operational workflows more effectively by connecting people and processes across various organisations, helping resolve IBOR and ABOR post-trade exceptions.

Following FINBOURNE’s integration of these capabilities, clients will have reduced resolution times as well as a reduction in risk and human error, which will ultimately increase operational efficiency and staff capacity.

“For our clients, the ability to configure and control complex workflows on the platform is a given; the next challenge is reducing resolution times for intraday breaks in their book of record and this enhanced integration with Taskize does just that, freeing up staff to focus on other tasks,” said Gus Sekhon, head of product at FINBOURNE Technology.

The development builds on top of the initial integration of Taskize into FINBOURNE’s LUSID platform in 2021.

The most recent functionalities are available as part of FINBOURNE’s Horizon programme, which enables clients to access, integrate and connect to a host of external technology and data sources within the LUSID platform.

“Asset managers’ operations teams are at full capacity and cannot afford to be inefficient in their approach to exception resolution,” said James Pike, interim CEO at Taskize.

“Greater interoperability of post-trade platforms is essential to enabling staff to do more with their time, and the data generated will be invaluable to senior management’s strategic decision-making.”

Last month, Meritsoft, a Cognizant company, announced the integration of Taskize’s collaborative workflow tools into its Trade Tracking and Exception Manager (TTEM).

The integration seeks to expedite query resolution to minimise trade settlement failures linked to shift to T+1.

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The joint, full-stack solution enables both the buy- and sell-side to manage shareholder disclosure obligations for long, short and takeover panel reporting.

Brock Arnason

According to the firms, the offering reduces compliance costs and manual dependencies as well as enhancing users’ control via its intuitive interface which simplifies workflow.

Speaking to The TRADE, Thomas McHugh, chief executive and co-founder of FINBOURNE Technology, explained: “Timely, accurate and audited data is the foundation of regulatory reporting. Regulatory rules are the building blocks on these foundations. Managing the required data as requirements change has become expensive and burdensome.

“Interpretation of data and rulesets together, as both change over time, is an even more difficult and expensive task if done alone. Our partnership with Droit brings this expertise from our firms and partnerships to tackle this challenge in a compelling way.  We are bringing cutting edge technology and community expertise together in a single end-to-end offering.”

Read more: Seilern Investment Management selects FINBOURNE Technology to support growth

The unified approach between cloud-based investment data management software provider FINBOURNE Technology and Droit, a technology firm at the forefront of computational law and regulation, ensures consistency and clarity when it comes to complex regulatory interpretations, as well as accurate reporting.

“This partnership enhances our ability to safeguard asset managers by making sense of shareholder disclosure data when it comes to complex trading books and provide a level of granular reporting detail that is unmatched in the industry,” explained McHugh.

Droit’s capabilities in translating and processing detailed guidelines from all major global jurisdictions, as well as automating the decision-making process for shareholder disclosure reporting eligibility, coupled with FINBOURNE’s advanced data transformation capabilities means that the new solution seamlessly maps the multiple data inputs needed to evaluate rules.

“The asset management industry can directly benefit from the experience of their sell-side counterparties. FINBOURNE’s platform, built specifically to support the volume and complexity of data that characterises position reporting, integrated with our consensus-driven eligibility rules, offers firms unrivaled traceability, transparency, and auditability,” said Brock Arnason, founder and chief executive of Droit. 

Specifically, the offering leverages FINBOURNE’s financial data management platform LUSID, embedded with Droit’s position reporting product – based on consensus interpretations of requirements from a consortium of six global banks, including Barclays, BNP Paribas, Goldman Sachs and HSBC. 

More than 100 global jurisdictions currently have position reporting obligations, meaning that market participants must report both equity and equity derivatives holdings to regulatory bodies – a complex, time consuming and costly process.

Read more: When it comes to desk set-ups, buy-siders are readjusting how derivatives fit in

Addressing the importance of position reporting, Arnason, tells The TRADE that “[it] is a data management and regulatory interpretation challenge that firms must tackle […] Those responsible for position reporting obligations will rest assured that they can disclose with confidence.”

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BNP Paribas securities services’ global head of investment analytics and data services, Neil Ryan, has left the bank to become head of product marketing and solution positioning at Finbourne Technology.

Ryan brings more than 25 years of global experience in data strategy, product development, business intelligence, data governance and data architecture.  

He has held senior data and analytics roles at Citi, EY and most recently at BNP Paribas Securities Services. At the latter, Ryan was product domain lead for performance analytics, risk analytics, ESG analytics, regulatory reporting and data-as-a-service; leading a team based across Australia, Singapore, Luxembourg and France. 

His expertise will help to advance Finbourne’s product and solutions communication strategy, with Ryan working closely with the firm’s development teams, as well as with senior stakeholders across the business. 

Commenting on his appointment, Ryan said: “This is an exciting time to be joining Finbourne, and to be a part of the growing momentum around its cloud-native solutions. Having spent much of my career in positions at leading financial services firms, I am excited to apply my business and technical knowledge to drive Finbourne’s growth strategy, as it continues to build its presence across buy and sell-side firms globally.” 

Finbourne, which now operates in Europe, North America and Asia, provides SaaS solutions to firms including Fidelity International, London Stock Exchange Group, Baillie Gifford and Railpen. 

Thomas McHugh, CEO and co-founder of Finbourne, added: “We are pleased to welcome Neil to Finbourne. As we continue to scale, he will play an important role in helping to communicate our unique proposition to the industry. I look forward to Neil applying his extensive market knowledge to drive our success and our goals of increasing transparency and reducing the cost of investing.” 

To replace Ryan, BNP Paribas appointed Jean-Marc Friess and Thomas Durif as co-heads of its data and digital services department, with immediate effect.

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The three venues have selected cloud-native financial data management firm FINBOURNE Technology as the infrastructure provider to build and operate the CT for the joint venture company.

The appointment of FINBOURNE followed a detailed evaluation process, which considered critical compliance, operational, technical and security aspects of a fit-for-purpose CT. The firm will work closely with the joint initiative to demonstrate the capabilities and features of their proposed CT platform.

“We are pleased to have won the tender to work with these leading firms, who are deeply focused on quality data, and are highly experienced in fixed income markets and running regulated Approved Publication Arrangements (APAs),” said Thomas McHugh, chief executive and co-founder of FINBOURNE Technology.

“Importantly, we see this as further validation of our modern, cloud-based, API-first technology, to deliver critical market data access and transparency.”

Neil Ryan has been appointed by the firms to lead the CTP initiative. Ryan has more than 30 years’ experience in a range of senior fixed income roles.

He will oversee the production of a comprehensive prototype utilising the venues’ capabilities in fixed income and trade reporting, to be able to deliver a consolidated tape (CT).

“The time has come to provide the European fixed income markets with a consolidated tape that is led by an initiative with deep experience in low-latency data processing, cleansing, consolidation and publishing within a regulated framework,” said Ryan.

“Our motivation is to improve transparency and spur electronification in the fixed income space. Our end goal is a cost-effective CT that treats both data contributors and consumers fairly, while enabling open and impartial access to meaningful and helpful data using existing infrastructure.”

The joint venture has been in the works since June last year, when Bloomberg, MarketAxess and Tradeweb set out plans to apply to become the consolidated tape provider through the public procurement process organised by ESMA.

Following the announcement, the three entities prepared a competitive request for information process to begin reviewing independent third-party partners that have the potential to offer the consolidated tape service. 

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In the last four years, Seilern claims to have tripled its assets under management (AUM) alongside increasing its number of clients and volume of transactions.

As part of its strategic growth plans, FINBOURNE’s financial data stack – including its LUSID platform and various SaaS and API-first capabilities – has been selected by Seilern to deliver timely investment data and the scalability and efficiency needed to meet its business needs as well as its expanding client base.

FINBOURNE’s LUSID platform will be leveraged by Seilern as a cloud-native data hub to bolster its decision making and client services.

“With over 30 years of operating history, we recognise that transformation is vital to continuing our success and facilitating future growth,” said Stuart Gunderson, chief operating officer at Seilern Investment Management.

“We are pleased to partner with FINBOURNE Technology in this journey and are confident LUSID will deliver desired future-state infrastructure while reducing our total cost of ownership. In time, we look forward to expanding the scope to achieve additional efficiencies.” 

FINBOURNE’s LUSID platform will offer access to data in one platform, allowing Seilern to assess new opportunities alongside the opportunity to track investment and redemption trends of its client base.

The platform will also aid with informed investment decision-making and client insights through LUSID’s data visualisation capabilities, allowing Seilern to create bespoke dashboards and graphs. In addition, the firm will be able to gain insights across metrics such as client holdings, inflows and outflows.

“With our domain expertise and SaaS-native technology validated by clients globally, we are steadfast in our mission to empower firms with the confidence to innovate on their own terms and support future growth,”  said Thomas McHugh, CEO and co-founder of FINBOURNE Technology.

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Mohammed Sohail, head of trading, Sarasin & Partners:

Neil Ryan, regulatory lead, FINBOURNE Technology: As the process of refining the requirements for a bond consolidated tape (CT) draws to a close, buy- and sell-side, and regulatory bodies are looking past the data quality challenges previously identified, to the practicalities of how a CT will deliver data. Taking an interoperable, API-first approach to CT data is going to be the first step towards joining up data with complete accuracy and confidence. However, while APIs are an essential starting point, they are not a complete strategy in themselves. Firms will need to consider whether they have the right control environment, entitlements protocol and domain knowledge, to translate across these data sets and the varying formats each uses, to garner granular insights that will drive growth. One obstacle we see in the way of this and will be a key theme for 2023 is the legacy infrastructure capital markets firms currently operate in, given recent reports have found as many as 60% of buy- and sell side-firms are still reliant on a mainframe – despite the industry push towards the cloud.

The advent of CT offers an opportune time to review the investment technology and data processes in place, and whether these will enable firms to efficiently extract and derive value from CT data, without additional cost and resourcing. This is particularly timely in a market with heightened volatility and geopolitical disruption. Being able to harness real-time data across critical data sets – including CT data – to gain a live view of positions, portfolio, risk, and exposure is going to be critical. A combination of a fit-for-purpose CT, an open API strategy and a holistic approach to organisational data delivered by the right data stack, will create the most consistent and valuable understanding of market prices. Crucially, pairing insights from CT data with other data sets and making it available across the organisation, not only promotes greater access to liquidity across functions, but ultimately, greater transparency of market opportunities, for growth and prosperity.

Lionel Sancenot, managing director Continental Europe, IRESS: For trading desks in 2023, we see a few key trends developing around market data, driven by growing client demand for better flexibility in their data provision partners. Desktop interoperability will play a more important role. Today, trading firms are not only interested in the quality and insights of market data, but also the ability to work seamlessly across multiple applications, driven by the need to be more efficient in a cost-conscious world. We see the potential for consolidation in the data provision sector, via increased M&A across market data infrastructure providers. To remain competitive as clients’ requirements consistently expand, larger organisations will be looking to secure additional data streams covering more instruments, markets and geographies to offer their clients, as well as owning unique data sets to commercialise. We expect market data providers will also keep pace with volatile markets by committing to new sites (such as the Euronext data site in Bergamo, Italy), giving them better proximity to exchanges, keeping latencies as low as possible. More market data solutions will move to the cloud and we expect discussions will progress in the Eurozone on the consolidated tape, however we doubt a resolution will be found next year.  

Brandon Tepper, senior vice president of investment intelligence at Nasdaq: High inflation, rising interest rates, and heightened uncertainty have led to increased market volatility and magnified the importance of investors having greater access to actionable data and analytics. Emerging strategies that we’re expecting to see investors lean in on to help them recession-proof their portfolios include leveraging macro-level data as a key leading indicator of economic health. As part of diversification strategies, we see the potential for investors to tap into ESG, commodities and digital assets, and growing financial markets such as Asia, Latin America, and the Middle East for new opportunities. Technology advancements and simple APIs that are accessible via the cloud improves optionality helping investors better catalogue and interact with their data unlocking efficiencies across their businesses. Our position at the intersection of the markets, technology and finance gives us a unique perspective to build demand-driven market-based solutions. With this position, we anticipate and are committed to creating a more seamless data experience helping investors gain investible insights.

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