A state-of-the-art FX OMS should provide a number of key features;
A state-of-the-art FX OMS should provide a number of key features;
- A scalable, performant, highly-available and open architecture: An Order Management System must be highly-available, with failover and redundancy at all levels. It will scale to meet the needs of the most demanding global banks. It should have clear and well-documented interfaces for all touch-points. It should have full Operational and monitoring capabilities designed in from the beginning.
- Breadth of product and order type: it’s no longer sufficient to just provide Spot Limit and Stop Loss resting orders. The best OMS offers Forward, NDF and Swap orders, multi-legged contingent strategies, Fixing/Benchmarks and Algorithmic orders; with flexible activation and expiration controls.
- A truly Global experience: Aggregating and consolidating orders into a central global book, regardless of originating venue or method. It will allow the bank follow-the-sun to pass orders securely between their various global trading desks or indeed to/from other banks
- Seamless combination of voice and electronic order: As the electronification of FX trading continues at a great pace, an OMS, such as Barracuda’s, will allow the bank electronically monitor and auto-fill orders in a highly efficient and controlled manner. In addition, it should allow orders easily be switched to/from electronic to voice and back.
- Robust segregation and visibility controls: Access to the OMS, down to the individual order level, must be highly controlled and on a strictly need-to-know basis. This provides greater client confidence but also protects the bank’s own staff from potential conflicts of interest.
- Adherence to global regulatory standards: As a global vendor with a global client base, we are constantly responding to and implementing change in response to new regulatory directives across many jurisdictions. The FX Global Code of Conduct is another key principle-based initiative that has driven OMS features. Comprehensive compliance and audit capabilities are a given.
In what ways has order entry functionality in particular been substantially improved in the latest generation of FX OMS?
By providing integration to the bank’s SDP, the various MDPs and buy-side platforms, the Barracuda OMS allows for full client self-service – order entry and also 24-hour modification of all order types.
When entering On-Behalf-Of a client, the Barracuda Order Entry tools offer a highly intuitive, fast and error-free means to capture all order types. Tools such as our graphical strategy builder allow Sales people build and visualise complex contingent strategies with a couple of mouse-clicks.
A further way the OMS has improved is with the ability to add new algorithms without code change. As a bank adds or extends their algos, the Barracuda OMS will auto-generate all the appropriate entry screens.
Where do the main benefits of an OMS that has been specifically designed for the FX market lie?
Unlike Equity or exchange driven markets, there is no single reference market price. A FX OMS requires much greater flexibility to define multiple reference sources and the flexibility to select the most appropriate. FX is a truly 24-hour market – there’s no place for over-night down-time or batch processing. Our OMS runs 24-hours a day, uninterrupted. Our intuitive User Interface and experience is immediately familiar to FX market professionals – easing adoption, reducing errors and facilitating speed of action.
How much customisation is possible with an FX OMS to cater for banks that are looking for more bespoke and flexible solutions?
An open, extensible architecture will allow banks to integrate their own components or to easily “inject” their own logic.
A mature and flexible FX OMS will already provide great flexibility out of the box. Through continuous investment in our roadmap, developed in conjunction with leading global banks, the Barracuda OMS can meet the needs of the largest of banks without bespoke customisation.
Where a bespoke solution is required, our Product, Professional Services and Engineering teams of market and technology experts work in agile partnership with our clients to develop any necessary new features.
What issues typically need to be considered by banks when it comes to OMS deployment and what can institutions do to speed up time to market and avoid major IT disruption?
An OMS deployment will typically be a replacement project. Sometimes a bank may be frightened by a perceived heavy-lift to remove an old and legacy in-house or vendor solution. It is important to work with the right vendor to implement the right OMS in a predictable, timely and cost-effective manner.
Our skilled deployment team will provide a clear and comprehensive plan to shorten the time to market. We work in partnership with the bank’s technology, security and operations team to develop a shared plan – considering all aspects of deployment, integration, migration of existing data, and training for both business and technical staff.
More commonly now, we can provide a fully hosted and manged co-located service, Order Management as a Service, to greatly reduce time to market and demand on bank staff.
The FX market is highly fragmented with numerous venues and channels. What operational and risk management challenges does this present to banks and what connectivity and integration toolsets should they expect from an OMS to help overcome these?
It is the FX market’s highly fragmented nature and large number of venues and channels that actually necessitates the need for a strong OMS. The need to efficiently and seamlessly receive and manage orders across multiple channels is a key example – rather than the bank develop and stay current with all these integration points themselves, the Barracuda OMS provides all the channel integration out-of-the-box.
New packaged and easy-to-adopt SaaS models for OMS’ are starting to appear. What advantages do they offer for smaller banks with lower order volumes who are keen to take advantage of these powerful toolsets?
A robust and comprehensive Order Management service is an essential tool for banks of all sizes. At Barracuda, we recognise that it’s not a one-size-fits-all. Different banks have different needs – functionally, technically and scale-wise.
We can offer a fully hosted and co-located service for smaller banks on our Greyspan service.
With our unique Order Hub service, we give smaller banks the ability to offer a cost-effective full service to their clients by seamlessly leveraging the strengths of other banks on the Barracuda network – this may be for currency specialisation, out-of-hours coverage or even algorithmic white-labelling.
What factors should influence a bank’s choice of suitable OMS provider to partner with?
In this article, we have touched on many of the key drivers for OMS adoption.The right OMS provider will:
- Help reduce operational, regulatory and market risk
- Allow the bank offer the most complete product and order coverage to its clients
- Have the global presence and client-centric service ethos to support the bank
- Have a proven track record of successful, referenceable client engagements
- Invest continuously in an active Product Roadmap to meet and define market needs
- Act as a trusted, long-term strategic partner to the bank
Barracuda FX, a Broadway Technology company, is that OMS provider.