BGC Partners has come a long way with its business intelligence strategy since the company's inter-dealer fixed income electronic trading platform, eSpeed, was first launched in the late 1990s. Over the years, the New York-based company--which began as Cantor Fitzgerald and now provides integrated voice, electronic execution and other brokerage services to investment banks and traders--has increasingly focused on delivering customized, real-time data reports to its key decision-makers and customers to help them react more quickly to changing market dynamics and how that might be impacting the revenue mix across BGC's brokerage, settlement and other businesses. Taking these efforts a step further, the company later this month is expected to implement Sybase's RAP - The Trading Edition system, a unified market intelligence platform that's designed to help BGC and other capital markets firms make more efficient use of data for analytics and reporting across the front- to back-office trade lifecycle. The system provides a single platform for access to common data shared by quantitative analysts, traders and risk managers, including support for real-time trade analytics and execution, pre- and post-trade risk analysis and intra-day regulatory reporting. Chris Crosby, senior vice president and global head of corporate technology at BGC Partners, is hoping that the system will enable people in the company's finance organization to more quickly and effectively slice-and-dice trading and settlement data to determine how the company's brokerage, settlement and other operational revenues are allocated each day. In addition, managers in BGC's operations group should be better equipped to drill down on settlement data to help them determine the company's risk exposures on open trades and across the different products it sells, says Crosby. BGC's increasing reliance upon BI for more on-the-fly decision making and intra-day risk monitoring and mitigation reflects the types of emphasis that securities firms have placed on analytical techniques since current market upheavals began roiling the industry last summer. Indeed, securities firms today are increasingly utilizing business intelligence and analytics in three areas: risk modeling to determine value-at-risk, stress levels, and capital adequacy; quantitative analytics for modeling investment strategies; and analysis of high-frequency trading strategies, says Dushyant Shahrawat, senior research director for investment management at TowerGroup.
Much of the industry's focus over the past year has shifted to settlement, clearing and operations as executives have become ultra-sensitive to analyzing trading data and investment positions to continually monitor and mitigate their risks, says Kevin McPartland, an analyst at TABB Group in New York. "The notion of the overnight batch shop is going away," says McPartland. Credit, risk and other systems that are updated regularly are now being analyzed periodically throughout the day by securities firms to identify trends or determine potential fraud in trading areas, says McPartland. BI has also played a more prevalent role in compliance activities as broker/dealers are under tremendous pressures to demonstrate that they have auditable transaction trails for their trades, including information about the date and time of transactions--and the systems those transaction are conducted across--in case regulators should ever look, says Sinan Baskan, director of business development for the financial services industry at Sybase, whose customers include Citigroup, Barclays, Credit Suisse and Mitsubishi UFJ Securities.
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