MORE EFFICIENT WORKFLOW

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1 HOW FINANCIAL SERVICES FIRMS USE TECHNOLOGY TO TURN DATA INTO ACTIONABLE INSIGHT MORE EFFICIENT WORKFLOW The desire to capitalize on data is leading firms to streamline workflow through expert collaboration and emerging best practices Three key points 1 Raise expectations. 2 3 Strengthen the core. Stay flexible. UNTYING THE KNOT On the buy side and the sell side, financial services firms rely on complex arrangements of systems that were not designed to work together. It s not surprising, then, that firms find it so challenging to streamline enterprise workflow. Effective workflow, however, is absolutely critical for reducing total cost of ownership, doing more with less and capitalizing on enterprise data. Firms that make the transition successfully let strategy guide technology instead of the other way around. They are taking a hard look at traditional approaches. Most of all, they are placing a higher priority on enterprise-wide efficiency, agility and adaptability than ever before.

2 _02 THE LEGACY OF TECHNOLOGY In the run up to the financial crisis, many firms deployed a great deal of technology to handle higher volumes and maximize opportunities for a particular strategy or asset class. These systems were deployed in traditional silos. Time to market was the priority. Fast forward to the post-crisis era. Firms have an abundance of tools, applications and systems that do not work together very easily and require extensive in-house support. Some are proprietary, others are from third-party providers, some are off the shelf. Each team may use dozens of systems to support complex workflows for business-critical tasks, such as position management, risk assessment, execution and more. Integration and data sharing in this environment are incredibly difficult. Older systems are often too deeply embedded and too expensive to change or replace. External software providers may not want to reconfigure their offerings to work with competitive products. Internal IT and R&D resources are stretched thin. At the same time, firms need to maintain excellent client service, but with smaller teams and tighter budgets. The bottom line: highly efficient workflow is essential but difficult to achieve. Enterprise integration introduces a tremendous amount of complexity. Firms make very large investments each year to implement and maintain in-house integrated systems and dependent market connectivity. In doing so, they not only increase their ongoing operating costs but also their future operating risks. When new regulatory reporting requirements or new asset classes are introduced, it s very difficult for these firms to react to change with agility and help drive the business forward. Brian Cunningham, Global Head of Bloomberg Connectivity & Integration ASSESSING THE RISKS The common approach to this problem is to allocate IT budgets to building new software, integration points, middleware and interfaces. This results in higher operating costs because teams are maintaining an increasingly large and complex stack. Operational risk is serious because any time a new issue arises, an asset management or capital market workflow is jeopardized and the firm may not be able to execute. Regulatory risk increases when integration problems prevent a firm from delivering required data or reports. All of these risks scale up dramatically for large, global firms that are orchestrating activities among dozens of offices and hundreds of systems.

3 _03 CHOOSING COLLABORATION More and more firms are examining these risks and deciding to seek expert assistance. Instead of looking inward to the IT team, firms are selecting collaborators that specialize in data, integration, distribution and related technology. Specialists are better able to create a seamless workflow experience because they can help firms reengineer workflow from an enterprise perspective. This big picture view creates opportunities to remove redundancies and potential bottlenecks as well as establish stronger connections across the front, middle and back office. Often, specialists enable firms to leverage established applications, connectivity and IT infrastructure instead of building their own. These offerings are the result of large investments in enterprise integration and other capabilities that a single bank, broker or mutual fund may not be able to match. Specialists also maintain extensive global service teams responsible for monitoring, maintenance and development. None of this happens quickly or comprehensively. Firms are reluctant to give up the total operational control that comes with managing everything independently. They do not want to get locked in to one solution provider or sacrifice future technology choices. Another concern is allowing external partners to change the flow of internal data about clients, positions and other sensitive matters even if that change increases efficiency. In a highly evolving marketplace driven by regulatory changes, investor demand for more transparency and dealer balance sheet constraints, integration is paramount. By connecting one s front-end trading applications within a single environment, a firm can realize much greater workflow efficiency by synchronizing inventory management, electronic trading, risk management and compliance. Mike Wood, Head of Bloomberg TOMS

4 _04 Collaboration drives efficiency Leveraging the experience, expertise and technology of partners that specialize in connectivity and integration can significantly streamline enterprise workflow. IT Manages Everything Specialists Provide Expertise Client Trade Internal Derived Client Trade Internal Derived Integration Enterprise Solution Proprietary Off the Shelf Core Proprietary Off the Shelf Core Many to Many Connectivity Any to Any Connectivity MAXIMIZING FLEXIBILITY To alleviate these concerns, solution providers are improving workflow while maintaining an exceptional degree of flexibility. Rip and replace is not an option. Firms need to be able to retain the internal systems and applications they deem essential (such as a compliance engine or decision support platform) and it should be relatively easy to connect these core elements to all of the field-proven tools, interfaces and infrastructure the provider brings to the table. What makes this possible are enterprise integration solutions that can only be developed through substantial and sustained investment and dedicated teams of experts. At Bloomberg, for example, workflow solutions are specifically designed to support smooth integration and data sharing among systems from a wide range of providers, in many different formats. Open identifiers and open (nonlicensed) APIs play a role too, because they enable firms to change the way applications consume data, or even change data providers, without recoding the whole apparatus.

5 _05 In this new environment, firms can simultaneously leverage their partners offerings and customize the workflow experience to meet specific needs. They can keep what they want, add what they want and change what they want. Some may continue to build their own tools. Others may use all of the data and infrastructure in a given vendor s portfolio. The point is that the user s workflow experience remains seamless, efficient and wellintegrated across the enterprise. What is under the hood may change. But when it does, the change does not disrupt workflow or require users to adopt new practices. COMPETITIVE ADVANTAGES The investments firms make in streamlining enterprise workflow pay off in important ways. When expanding around the world, firms can more easily add new offices and users if there is a single, integrated workflow experience that is available in the cloud and does not need to be reimplemented at every site. Improved flexibility also means faster reaction to changes, such as new regulatory requirements, new data fields or updates to third-party software. Traditionally, the response to significant workflow changes would involve a site visit from consultants and software analysts followed by code patches, reimplementation, local installation and testing. If the workflow occurs in the cloud, technology partners can manage change remotely and deploy changes globally without reconfiguring individual applications or servers that are only installed in a certain office. This approach helps firms reduce total cost of ownership and free IT teams from the burden of designing, developing and maintaining software applications, data distribution infrastructure and multiple integration points. It also sets the stage for users across the front office, middle office and operations to find, analyze and capitalize on important data much more easily and with greater confidence. For many of the world s biggest banks, workflows that move from the front to the middle to the back office are often complicated and multifaceted. It s not easy to move from whatever architecture they had in place yesterday to a new system. But in the long run, the ROI is going to be substantially better than continuing as is. Peter Warms, Head of Bloomberg Product Development for Global & Symbology

6 _06 THE BOTTOM LINE 1. Raise expectations. Focusing on a single department, line of business, office, region or asset class makes it difficult to streamline workflow across the firm. Solutions can be phased in, but the vision needs to include every part of the enterprise. 3. Stay flexible. Workflow solutions should adapt to the firm s needs, not require firms to reinvent themselves. Choose partners and technologies that emphasize openness, adaptability, choice and long-term flexibility. 2. Strengthen the core. Financial firms excel in analysis, insight and decision making. Enterprise workflow, data distribution and software integration are not usually core competencies. Off-loading these tasks to partners can improve workflow dramatically.

7 MORE POINTS OF VIEW The discussion doesn t end here. Experts at Bloomberg are engaging in conversations about these concepts with professionals across the financial industry. Adopting a bold new perspective on data and technology can help firms realize five important competitive advantages. DOWNLOAD THE REPORT Contributors Brian Cunningham, Global Head of Bloomberg Connectivity & Integration Peter Warms, Head of Bloomberg Product Development for Global & Symbology Mike Wood, Head of Bloomberg TOMS Capitalizing on all the data flowing through the enterprise creates opportunities to reduce operating costs significantly. DOWNLOAD THE REPORT CONTACT US TODAY Bloomberg for Enterprise is ready to help firms improve workflow. To find out more, contact us at [email protected] or visit bloomberg.com/enterprise bloomberg.com/trading-solutions BEIJING FRANKFURT LONDON NEW YORK SÃO PAULO SYDNEY DUBAI HONG KONG MUMBAI SAN FRANCISCO SINGAPORE TOKYO The BLOOMBERG PROFESSIONAL service, BLOOMBERG and BLOOMBERG Order Management Systems (the Services ) are owned and distributed locally by Bloomberg Finance L.P. ( BFLP ) and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India, Japan and Korea (the BLP Countries ). BFLP is a wholly-owned subsidiary of Bloomberg L.P. ( BLP ). BLP provides BFLP with all global marketing and operational support and service for the Services and distributes the Services either directly or through a non-bflp subsidiary in the BLP Countries. The Services include electronic trading and order-routing services, which are available only to sophisticated institutional investors and only where the necessary legal clearances have been obtained. BFLP, BLP and their affiliates do not provide investment advice or guarantee the accuracy of prices or information in the Services. Nothing on the Services shall constitute an offering of financial instruments by BFLP, BLP or their affiliates. BLOOMBERG, BLOOMBERG PROFESSIONAL, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG ANYWHERE, BLOOMBERG TRADEBOOK, BLOOMBERG TELEVISION, BLOOMBERG RADIO, BLOOMBERG PRESS and BLOOMBERG.COM are trademarks and service marks of BFLP or its subsidiaries Bloomberg Finance L.P. All rights reserved