Download PDF

As CEO of AcadiaSoft, like many other executives across the financial industry, I lead an exceptionally talented team that deals with the strategic issues that affect the company’s growth.

In doing so it is crucial we understand what our clients need, both now and in the future, and we do everything we can to deliver on those needs. The COVID-19 crisis has created a huge challenge because it has thrust tremendous uncertainty and whole new set of challenges upon our clients. We know the crisis will end eventually but it still remains very difficult to foresee the fundamental, long-term impacts on our clients, the markets and, in turn, our business.

I am sharing this perspective with the hope of advancing the dialogue on the medium/long term impact of the crisis on us all.

If you work in the financial industry, you no doubt have been faced with market volatility, volume spikes and forced virtualization as a result of the COVID-19 crisis. By now you’ve likely made changes within your organizations to coordinate your crisis response. Your teams are operating at a faster pace – helping you stay close to the quickly-evolving needs of clients, staff and shareholders, and how competitors are or are not adapting to this new world. Focusing on these changes absolutely helps manage immediate-term risks but it also allows you to look ahead at the bigger issues and opportunities that could create new ways of working with clients and partners across the market.

In the not-so-distant future, there will be time for post-crisis reassessment. Some of the immediate effects we are seeing and anticipate include:

• Project initiatives will be streamlined – fast. Those (a) delivering tangible, near-term value or (b) clearly positioned to solve the big issues and opportunities arising or reinforced during the crisis will be accelerated. Those not meeting that criteria will be de-prioritized – some back-burnered, others discontinued.
• Business processes will be re-evaluated. Some will be adjusted back to their previous form while others will change based on what we learned about ourselves and our clients during the crisis.
• Legacy policies will be challenged. New risks need to be thought through and controlled. At the same time, what made sense in a world where physical presence in company offices was assumed may not be practical in the more virtualized world we are likely to see in the future.

Many of our decisions cannot be pushed off until the fog lifts and will therefore require an immediate view on what will change over the next weeks, months and years.

There is a clear desire across clients, partners and within AcadiaSoft to capture the most value possible from this real-world virtualization experiment. We believe we have achieved productivity levels at, and in some areas, beyond what was ever reached within the physical office environment. We believe we can and will embed these gains in our business to change how we communicate internally and with clients, as well as how we facilitate communications across the industry.

Following is my early view on the Top 10 COVID Impacts that need to be monitored closely and considered when formulating plans.

1. Minimization of cost and operational risk. The uncertain future will ultimately lead to further reductions in unnecessary costs. At the same time, operational risk will be minimized through investments in greater resiliency and scalability. Our clients and the broader community will be under increased pressure to reduce cost and using mutualized services like AcadiaSoft applications can usually assist in this goal.

2. Results-driven. As remote becomes the norm for knowledge workers, management becomes more results-focused. Results indicators will play a larger role to keep organizations on track – with visibility across teams to ensure company, team and individual goals are regularly set and measured. We will build on our internal OKR (Objectives, Key Results) process to help assure that our employees can measure progress they are making and how it aligns with the company-wide goals which are ultimately industry-driven.

3. Reliance on video conferencing. With video conferencing now become mainstream and mission-critical, the capabilities will need to become more widely and more seamlessly integrated with apps to make workflows more interactive between users. This may cause some challenges with interoperability between platforms.

4. Increased Pace. In this new working environment, we see a movement towards more frequent, shorter communications. Longer emails have been replaced with shorter, interactive text or IM messaging exchanges. Decisions aren’t waiting until the weekly meeting; they are happening in much shorter cycles, or just happening in real-time.

5. Digital workplace. The movement towards the Cloud will be accelerated as firms will be increasingly reliant on Cloud Apps to provide workforces with access to applications from remote locations. This will also ensure regular system upgrades without the need for heavy duty maintenance or disruption to service. At the same time, secure electronic authorization rather than wet signatures will become the standard and replace the need for paper signatures.

6. Data security. Cyberattacks have escalated dramatically during the crisis. At the same time many in the workforce have become more productive and interactive, many using consumer market orientated apps to do so. Companies will now need to strike the right go-forward balance by assessing and reigning in some of the risks resulting from forced virtualization while at the same time securely locking the key benefits. Infosec has been an area of investment at AcadiaSoft for the past few years and continues to be a top priority -assisted by our ISO 27001 certification.

7. Lifecycle transparency and flexibility. Access to real-time data to view, understand and correct errors and inefficiencies within the trade lifecycle will be crucial. As their trading revenues soften, firms will need to have the tools and automation in place to continually improve operational efficiency. AcadiaSoft recently launched its Data Exploration service – enabling member firms to measure and compare their internal processes vs industry averages and peer groups.

8. More streamlining. Creating industrywide standardized processes wherever possible is even more important in a remote environment where manual methods are difficult or in some cases impossible to perform. Moreover, standardized processes combined with effective use of artificial intelligence and machine learning has the potential to reduce industry costs by billions of dollars over this decade.

9. Prioritized Innovation. This crisis has forced companies to reassess needs and create solutions at unprecedented pace and because of this we expect innovation to flourish in the coming year. The challenge is to recognize and foster it in a way that brings meaningful long term change which will force us to prioritize.

10. Further diversification in the workforce. With work from home being more widely accepted, companies have more hiring options and individuals have more options with the regard to the types and locations of companies where they work. In addition, some of the skills that have helped people excel in the office setting will not entirely transfer in a more results-driven digital world.

There is a clear desire across clients, partners and within AcadiaSoft to capture the most value possible from this real-world virtualization experiment. We believe we have achieved productivity levels at, and in some areas, beyond what was ever reached within the physical office environment. We believe we can and will embed these gains in our business to change how we communicate internally and with clients, as well as how we facilitate communications across the industry.

About AcadiaSoft

AcadiaSoft, Inc. is the leading industry provider of risk and collateral management services for the non-cleared derivatives community. AcadiaPlus is an open platform that provides the sell-side, the buy-side and fund administrators with specialist applications and a third party partner ecosystem for the straight-through processing of the entire risk mitigation lifecycle. Backed by 16 major industry participants and market infrastructures, AcadiaSoft is used by a community of more than 1100 firms exchanging approximately $700B of collateral on a daily basis via its margin automation services.

AcadiaSoft® is a registered trademark of AcadiaSoft, Inc. ISDA SIMM™ is a registered trademark of ISDA.

For more information please visit us at acadiasoft.com
or email us at info@acadiasoft.com
Follow us on Twitter and LinkedIn