Creating Order Out of Chaos

Disparate systems architecture and the challenge of “operating as one”

According to a recent Tabb Group report, funded by SimCorp, almost one-third of asset management firms in North America continue to rely on multiple system platforms despite the vital role technology plays in supporting the trade process. Migration to a single vendor environment to reduce risk and increase operational efficiency remains a goal for the majority of financial firms. However, in the Bank Director 2016 Technology Survey it was found that the median number of deployed systems in each institution is five. Delays in processing transactions, the inability to consolidate cash and positions in real-time, and the risk of manual errors negatively impact any firm’s current and future revenue.

The cost of ongoing disparate systems and pursuing the goal of a single system

Given the growing complexity of trading and increased regulatory supervision, the IT infrastructure of a financial organization requires increased flexibility and effective integration between disparate and specialist applications to stay competitive and also aids a single platform environment.

Historically, there have been three main approaches to maintaining best-of-breed applications across the enterprise with data consolidation via an end-of-day batch process; deployment of a single vendor application on multiple platforms (due to the requirement to support separate instances in global locations); and legacy system remediation – usually as a result of acquisitions and mergers – linked through middleware.

According to a Tabb Group report, the biggest challenge is experienced by those firms maintaining legacy systems but lacking integration. Exposure to operational and credit risks as a result of breaks between disparate systems and data sources being a prime consideration for firms. Regardless of size, a financial organization needs real-time access to accurate trading information across the enterprise, especially in the current climate of tight regulatory requirements such as MiFID II and Dodd-Frank. In order to expand into new markets, increase product offerings, comply with new regulations, and adequately service its customer base, a fully integrated technical architecture is required.

The move to a single platform can be an enormous undertaking and can have a significant impact on operational and technical resources as the project needs to be undertaken while daily operations are maintained. Migration tasks can involve extensive project planning; system design; solution configuration; the installation of new servers and software; extensive testing; parallel runs; reconciliation between legacy and new systems; the ensuring of accurate internal, customer and compliance reporting; and user training. Unsurprisingly, there are a number of documented implementation and migration projects that have failed at great cost.

Potential solutions to maintaining disparate systems – but acting as one

The use of middleware applications to integrate systems and data sources can be implemented for firms choosing not to migrate to a single solution after middleware solutions have evolved to meet the basic requirements for interfacing applications and consolidating information enterprise-wide. Middleware vendors provide data and application access capability and some vendors offer an assortment of pre-built adapters that provide bi-directional connectivity between software applications, databases, file systems, and directories.

Integration and mapping solutions that utilize rules-based engines to automatically transform files into desired layouts and route them to the appropriate target systems can also be used. Although this approach seems practical, there are often concerns with regard to scalability and the level of system diversity. Depending on the number of required connections, the cost and complexity of maintaining tightly-coupled middleware, can also be significant. Considerations must also be made for time and cost of integrating poorly documented but mission critical legacy systems using relatively inflexible or functionally limited data integration tools.

Accelerated financial message and data integration with Volante Designer

The Volante Designer solution transforms data from any source into any format and routes it to any destination. Designer is platform-agnostic and database-independent, allowing for integration to any third-party or in-house application. Volante Designer incorporates business logic into the design of the solution. Users can model processes, through configuration rather than coding, tasks such as parsing, validation, data enrichment, normalization, routing/orchestration, and exception management and also includes an integrated test harness to confirm the results are as specified. Volante Designer also automatically generates all the necessary documentation, leaving integration to be a logical extension of the application’s functionality, not simply an interface component.

Volante’s Service Oriented Architecture approach allows firms to manage business logic by integrating processes, not just systems and applications. Volante’s Code Generators automatically convert Designer’s rules-based models into runtime libraries that can be deployed into any operating system, accessed via API calls or called as services within any Services Oriented or Micro-Services Architecture. The generated code can be invoked from integrated applications, creating direct calls between systems, thereby reducing the number of required connections.

To further simplify design and speed of implementation, Volante maintains a growing library of more than 330 plugins and transformations. Volante supports a very wide range of message and data standards and message formats such as SWIFT, ISO 20022, Real Time Payments, FIX, FpML, EDI, as well as other generic formats such as XML, CSV, and Cobol Copybook. These out-of-the-box plug-ins and transformations, together with the rich processing capabilities of Volante Designer and automation, enable enterprise-wide integration projects to be completed and altered in significantly less time than alternative solutions and help bridge the gap between legacy and modern systems architecture.

With Volante Designer, integration projects become manageable off-the-shelf implementations removing the high costs and risks of legacy system upgrades and installations of new applications by “insulating” core systems from the complexities of integration and external change. Volante Designer enables financial organizations to not only fully integrate its current technical architecture in less time and cost, but also enhances processing.

Volante Designer Download the executive briefing