It might be a strange discussion to have
at SIBOS but the future of the financial services industry does not lie with closed proprietary networks, but a structure
that includes all networks. A network of networks concept that mirrors the integration of voice networks across the globe.
Evare is a very inventive managed services
house with a very wide understanding of the securities industry problems in stepping up to the globalisation issues, that
offer such huge benefits to the financial services firms and their clients.
With technology designed to consolidate and
transform electronic messages, the closed network concepts are alien to Evare. Although they are a partner of SWIFT and a
SWIFT member through Loeb Partners and support many millions of messages going through their system on a weekly basis Evare
has a far clearer appreciation of the ultimate industry solutions that will allow cheap global connectivity of dealing counterparties
and their agents.
By offering a bureau type and concentrator
capability of electronic messages Evare is able to fulfil the SWIFT ideals, but this falls short of endorsing closed networks
as the best future for the Global industry. The securities industry will eventually need to go the same way as the voice networks
decades ago and produce a global communication structure that enables the many networks to carry XML messages leaving the
financial services firm to choose the network supplier best suited to their needs.
This network structure would not require
so much emphasis to be put on structured message standards that take a life time to implement and only really penetrate the
wholesale market leaving the retail market on the outside looking in.
The ability of Evare’s technology to
transform and integrate different message types for execution and settlement puts them in a pivotal position to answer some
of the key questions now facing the financial services industry in Europe. What’s more the management team at Evare are fully aware of the industry
problems and able to produce solutions.
It does not matter if the messages are payments
or securities related a FIX message or SEPA, the Evare solution looks to have some considerable value. However, Evare will
be ploughing a very lonely furrow unless the financial services industry starts thinking more strategically about how technology
can be best implemented and changing the existing processes are key to the successful implementation of most systems. Can
the financial services industry throw away the shackles of antiquated processes? Can the industry stop their vested interests
and protectionism to create a service industry where the customer interests are most paramount? It’s not likely without
a very big and compelling stick; stand up new Regulations!
The European markets will be undergoing some
significant changes in the next few years, brought about by the key political agenda of a single EU market place. To this
end Evare has plenty of technical possibilities as one of the main software suppliers to achieve the goal of providing tangible
business rewards to its customers.
Is SWIFT part of the solution or part of
the problem? This question arises regularly behind closed doors and the answer often depends on the individual’s personal
views of closed and secure networks or their relationship with SWIFT itself. There is little doubt that SWIFT can be a major
enforcer of good for the industry but they appear hamstrung by their own bureaucracy and insistence on having control. Many
a good idea has been supported by SWIFT but then disappeared into the black hole of committee review, never to be seen again.
Such control over initiative and invention is not great for progress and change. This is where industry initiatives like FIX
have such attraction and can cut through red tape and become a success because it’s what the market needs. This is a
very alien concept at SWIFT I would guess and I note the recent split between FIX and SWIFT. The TWIST initiative is another
industry push for development and real change throughout the vertical service supply chain in the financial services industry,
which for the first time includes Issuers and market suppliers with institutional investors.
The TWIST organisation is now the main focal
point for financial services companies. It is attempting to bring about the business alignment of treasury and securities,
together with tying the requirements of the issuer and the primary market with the many standards problems in the securities
industry, which have long since been imbedded and set in inertia. Evare has not yet joined the TWIST initiative, but with
their all-round business and technology capability they would certainly have a value by contributing. I understand that Evare
is considering TWIST membership currently.
SWIFT does not have any leadership role in
TWIST, but they clearly have a vendors’ vested interest in any TWIST conclusions and outcomes and as such SWIFT must
keep out of interfering in any solutions that TWIST promote and they must be kept on the outside.
Evare is setting up a European office in
London in the New Year, this is an obvious decision of intent
to go where the best pickings are and their commercial future looks extremely bright as a result. There is little doubt that
as the securities industry throws off the self imposed handcuffs of closed proprietary networks and goes for a structure of
a network of networks, firms like Evare are going to be very important and score heavily commercially if they can maintain
their strategic business values and produce systems that have a future way beyond the FS industries present position.
By Gary Wright
