TTW PROFILE

Clearly, the growth in disparate best-of-breed trading systems and the slow pace of change in back-office technology created a major integration challenge. Straight through processing (STP) projects are taking the lead in the priorities as financial institutions are facing a much more competitive environment where the cost of doing business has to be constantly decreased. Middleware technology has been proven in many trading rooms as the "cure" for the integration problem, both between trading and risk management systems as well as between trading and the legacy back-office environment.

At Mint, we are currently engaged with several large implementations of our middleware products. Among those that can be publicized, I can mention large global implementations at UBS, National Australia Group, Federal Reserve Bank of New York and ABN Amro. In all of those cases, we are implementing our solution in order to introduce to the organizations a new and better way to glue financial applications together and eliminate "point-to-point" proprietary interfaces among the applications.

We have recently launched a new module for our middleware offering: Rule Manager. The Rule Manager engine provides the ability to easily establish a knowledge base (or message repository) which represents the meta data for financial messages. The organization can define, via a GUI interface, the message structure, relationship between messages and validation rules, as well as transformation rules between different financial libraries. In addition, Mint supplies a wide variety of ready-made financial libraries like Swift, FIX, Global Oasys, ISITC and many others. The beauty of the product is that it empowers the business user and not only the IT staff. With the GUI screen, a business user can define the message structure and easily define the transformation rules with no programming at all. This eases the pressure on IT resources and the implementations of STP projects.

I see two main challenges: one is the emergence of the Internet as a fast and scalable trading platform, and the other is the need for a much more robust solution for application integration. IT managers will have to deliver reliable integration of trading rooms with back-office operations in order to provide a greater degree of STP. The main challenge for them will be to implement technologies that can ease these tasks, and the emergence and growth of middleware technology (and mainly the one that takes care of gluing disparate applications beyond the "plumbing" level) is a clear sign for the trend.

Trading room technology will have to deal with exponential growth of Internet technology on one hand and legacy back-office topology on the other hand. Since I see the technological gap between front-office systems to back-office systems constantly widening, the main (and practical) challenge would be to keep on upgrading the trading room technology with the level of absorption of the legacy environment.

From my point of view, the fact that trading room technology must interact with legacy technology is the main obstacle to a much faster pace of implementation of new technologies. CIOs understand that maintaining "islands of information" for the front and the back offices is not the right way to go. A reliable bridge must be in place between the two islands in order to get the trading room technology to advance further.

I believe that since there's life beyond Y2K, the major problem is how to bridge the severe gap between the shortage in IT resources and the pressure from traders and other business users for faster implementations based on new technologies. It's not a matter of being awake all night, but more the need to wake up in the morning with concrete solutions that can satisfy both sides of this conflict.