David Brown, Chief Operating Officer, IPC discusses how well networked Financial Services communities create resilience in difficult times.
We are now living through a previously unimaginable scenario, where the COVID-19 virus is impacting all major trading locations around the globe simultaneously. As a financial institution, some of your traders may already be working at home in self-isolation, or else unable to work as they are ill. Others, able to travel and classified as essential workers, have opted for your disaster recovery site instead. Your diminished, dispersed, and in some cases, trading-from-home workforce creating increasingly complex scenarios for your Compliance Departments to manage. How do they continue to comply with prescriptive requirements around voice recordings and data capture? What happens when regulated trading activity – that in all ordinary times, must only be undertaken from official premises, and under strictly controlled conditions – is happening out of someone’s living room, with a toddler in the background?
Finding Resilience in Unprecedented Times
And these are wild times – the markets are like a rollercoaster. In FICC markets, we are seeing extraordinary volatility in Treasury Yields. Your counterparties are likely experiencing the same issues. There are heavy fluctuations in pricing, spreads are widening and it’s unclear where the liquidity really lies. You need to continue servicing clients, making prices, accessing liquidity and managing risk.
For firms that are highly dependent on a small group of venues and counterparties for market access, this could spell disaster. But for those with access to a large, diverse community, this is an opportunity to shine, to demonstrate real differentiation from competitors.
Large networked communities create resilience. A successful community network offers its participants connectivity to an already built, diverse and global financial ecosystem – one that includes a wide variety of counterparties for price discovery, liquidity and execution, such as brokers, dealers, inter-dealer brokers, exchanges, dark pools, hedge funds, asset managers, institutional investors, trade lifecycle services and market data providers. In other words, the information that firms need to find liquidity, and the ability to access it.
The Power of Human Connection
The pandemic has touched every one of us: our families, our businesses, our communities, and our very way of life. These are not just challenging times; they are also uniquely interesting times, in which we have the opportunity to truly test the strength and resilience of us as individuals, our communities, our socio-economic structures and our markets. It’s at times like these that we see what we are really made of. This is the time for market participants, and their service providers, to pull together and support each other, dynamically responding to the emerging challenges.
Our Financial Markets are Critical Infrastructure
In calmer times, it’s easy to forget the critical role that our financial markets and their infrastructure play in underpinning world trade, commerce and supply chains. And taking a step further – the role that they then play in ensuring that workers get paid, that people can buy food, that they can continue to access healthcare and medicines. This is absolutely dependent on maintaining effectively functioning financial markets. Taking these factors into account, several governments around the world have classified many financial services workers as essential. These critical workers must be supported in continuing to work through this time through the provision of adequate transport and childcare.
IPC Continues to Support your Firm
IPC remains focused on empowering all financial market participants to maintain business continuity by enabling traders and other regulated users to work remotely during these challenging times. We are dedicated to supporting our customers’ business continuity and disaster recovery plans through a variety of our products and services such as IQ/MAX® Omni, Remote Devices, EVS as a Service and Disaster Recovery as a Service.
This article was previously published by IPC, a client of The Realization Group, HERE