Choice and Competition in Post Trade Matching

B.I.S.S. Research White paper

This discussion paper commissioned by Salerio has been produced to investigate the pros and cons of bilateral matching within financial institutions (FIs) against central matching by organisations supplying third party services.

Financial Services firms are facing increased transaction costs and volatile volumes that are currently at a decade low.

To date, the matching of transactions has mainly been a dual operation, with internal matches covering both front and middle offices to produce a transaction record, which is then matched externally.

This is essentially a doubling up of costs, but is only part of the overall transaction cost chain.

This discussion paper will examine how matching has evolved and look at the reasons why financial institutions should be looking to acquire or develop their own internal matching to potentially downgrade reliance on third party matching suppliers and the benefits this will bring.