Beginner's Guide to Banking Technology - Part 2 - Capital Markets

Capital markets industry is highly complex with number of players, asset classes and market specific variations. High transaction volumes, straight through processing and operational risk management have driven capital market institutions towards leveraging technology to address these challenges. Global nature of the industry, multiple asset classes and complex processing from front-to-mid-to-back office have resulted in huge application landscape catering to these diverse needs of the players. Increasing regulations, ongoing business priorities and business case pressures have resulted in evolutionary approach to technology and systems rather than transformational approach. There are number technology vendors specialized in various aspects of the transaction life cycle for industry players resulting in home-grown applications co-existing with multiple commercial off-the-shelf (COTS) products to cater to the processing needs. Unlike traditional banking, in capital markets number of intermediaries come together to create and process products that enable smooth flow of funds from money saving investors to money seeking issuers. These industry players and their IT systems have to work in close collaboration to achieve processing efficiency and automation. Standardization of business products and message communication standards play a key role in bringing such efficiency to the market. Capital market firms deploy large IT workforce to manage the complex system landscape and smooth functioning of business operations. This book is aimed to provide an overview of the industry players, transaction processing for various asset classes and IT applications to such technology and operational staff working in capital market firms.
This book starts by introducing industry landscape, role of market players in the transactions processing for various asset classes and relationships between players. Business context and application landscape are discussed for each of the business function like retail brokerage, wealth management, institutional brokerage, asset management, custody and market infrastructure.
It is very important for the technology staff working in capital market firms to understand overall industry context, technology landscape and context of their work in that. Knowledge of upstream and downstream system interfaces and their criticality helps appreciate the overall business relevance and criticality of their particular area/ application. This book aims to provide such an understanding in non-technical way to both technology and management staff. This book is mainly focused on beginner level knowledge but can also be used as a reference in this domain.

Each firm and market has a variation in products, terminology and technology. This book attempts to capture the landscape in most common and generic way possible and such differences are highlighted wherever possible. Information presented in this book is for education and knowledge purposes only and is not intended to recommend any target architecture or product.

This book is part 2 of the 3 book series on banking technology. Part 1 was published by JAICO publishers titled “Retail Banking Technology” and released world-wide in Jan 2015. Part 3 will focus on corporate banking technology.