Waters Rankings 2015 ─ Winners' Circle: Bloomberg

What trends are driving your IT road map?

Dan Matthies, head of Bloomberg AIM: About 10 years ago we started to focus on supporting alternative investment styles. Recently, that has been an increasingly popular subject. Even within the traditional long-only investment houses, more and more we're seeing them diversify into alternative strategies. As for the reconciliations space, from the beginning we have been different than other order management systems (OMSs). Our opinion from the outset was that we can give clients more integrity on position data used in their OMS if the positions shown on the screen and used in calculations can be interrogated and explained by allowing users to drill down to the transactions or adjustments that created them. One requirement to this approach is a true reconciliation tool. We're unique in that our reconciliation tool isn't a generic standalone tool, but rather one that is natively built into Bloomberg AIM and embedded with our own data. What that means is that if we do find something that needs to be adjusted, we understand where that data point comes from and we can make sure that the user has the right accounts, the right securities, the right information and the right date to make that adjustment.

What recent enhancements have you made to the AIM platform?

Matthies: Operational control has been important, both to our clients and to their investors. We've put a lot of investment into the post-trade process as Europe migrates from T+3 to T+2, and it won't stop there as other regions will follow suit in enforcing shorter settlement cycles. So we try to give our clients not only the platform and connectivity that they'll need to manage and automate that, but also the tools and workflow to address exceptions faster. The clients and analysts who we talk to also don't believe there will be any slowdown in the regulations coming out. Part of that is keeping up with new or modified regulations and the growing requirements from investors. It's also about handling the number of data points that must be checked at each point in the workflow to ensure compliance. This trend has increased the capacity that you need from an automation and overall rule-management standpoint. We've made a big investment over the last three years to beef up our compliance engine, our audit capabilities, and our compliance controls and tools so firms can scale up as they need. And then there's the trend toward being more global. We continue to be the most global OMS. We're in nearly 85 different countries today. We've continued to focus on allowing clients to have the investment agility that they need to go after opportunities when they see them.

Can you preview future enhancements for our readers?

Matthies: We are most focused on improving the order and execution management capabilities of Bloomberg AIM. We need to enable our clients to trade across the securities that they manage, in both an efficient and a compliant workflow. If you think about how most technology stacks are set up, you've got a PMS that speaks to an OMS that speaks to an EMS that goes out to a network, which eventually accesses liquidity, and underneath all of that is a data management layer. There's a big debate in the industry between best-of-breed versus having an integrated solution. Because of the investment Bloomberg is making in each of these areas, our clients won't have to choose between the two if we can ultimately deliver both. We also realize that clients want and need to have options. So, we'll continue to have an open architecture that allows them to move their data into or out of Bloomberg so that they can integrate it with third-party or home-grown systems.

What do you think separates AIM from the competition?

Matthies: It's the Bloomberg DNA. We offer our clients a variety of advantages across security data and analytics. In the derivatives regulations space last year, we were first to market with solutions for both SEFs and EMIR. The advantage that our clients had was a single, integrated workflow, covering all asset classes, which enabled them to comply with the new and unprecedented reporting requirements, while minimizing disruption to their daily operations.

Again, looking at reconciliations, why is this an area of focus for you?

Matthies: Increasingly, our asset management and hedge fund clients are scrutinized more and more by their investors ─ the asset owners ─ as needing to have more effective data governance practices. We provide a tool that's recognized in the marketplace for helping them implement operational excellence.