Disruptive FinTech: Rocking the boat on stormy seas

There are certain FinTech trends like regulation, technology, disruption, demographics and insight that are driving opportunities in the capital markets vertical. However, there are challenges as well – it is a global and complex industry while also being heavily regulated. One way FinTech firms are dealing with the challenges is by partnering with large institutions to obtain established distribution platforms. Our market leading open platform and market data platform provide a great opportunity for FinTech partnership. A managed services approach to the delivery of the Thomson Reuters platform also ensures that the partnership obtains cost efficiency and differentiation in a competitive industry.

Managing liquidity, market & credit risk

There are multiple challenges in measuring, mapping and mitigating credit, market and liquidity risk and I have been actively exploring these with risk managers and related practitioners in the market.

Fundamentally many variables influence how the market is responding to and interpreting liquidity risk management. In an interview I recently had with Finextra (above), I considered liquidity risk from a data perspective and explored the types of challenges practitioners are confronted with as well as how to best overcome them.

During the interview we approached the question of how the market is interpreting risk management by breaking liquidity risk management into two parts. Firstly the market risk management element, i.e. the potential reduction in price an institution will have to accept if liquidity in the market dries up and they are a seller. The second part relates particularly to the buy side and how they manage the risk of their assets under management being reduced through redemptions. (more…)

AIFMD & IFRS: Fair value measurement & portfolio valuations

Evaluated pricing sits at the heart of fair value measurement. This hasn’t necessarily always been the case. In an interview with Finextra, Jayme Fagas, Global Head of Valuations & Transparency – Thomson Reuters Pricing & Reference Services, takes a look at the changing role of evaluated pricing for practitioners and its importance for portfolio valuations.

The significance of evaluated pricing for portfolio valuations centers and relies on the ability to defend an evaluated price. From a fair value pricing perspective, the capacity to defend an evaluated price is what’s truly needed to meet the regulatory obligations that IFRS and AIFMD as well as numerous other regulations have placed on market practitioners.

Access to market observable inputs is identified by Fagas in her interview with Finextra as one means to defend a price. Although a number of vendors do in fact offer prepackaged measurement tools, Fagas is cautious of their shortcomings resulting from a lack of clarity around how an exact measurement has been derived. Instead she asserts that the best outcome involves a combination of the measurement plus all the available market observable inputs which collectively produce a full package. (more…)

Risk data aggregation, reporting, & governance

There has been much said about the challenges market participants face when trying to address regulatory change. The cost and resource implications of meeting new regulatory reporting requirements and enhanced risk management obligations are both significant and unavoidable. In an interview with Finextra, Marion Leslie, Managing Director – Thomson Reuters Pricing & Reference Services, explores data management in the context of today’s demanding post-crisis risk reporting climate.

As each new regulation introduces fresh complexities for firms – market participants need to source, manage and store the relevant data, demonstrate transparency and lineage of that data, as well as show confidence in their data and underlying processes.

In the interview below with Leslie, it is revealed that banks are still often more focused on the creation of risk management reporting procedures than the actual analysis and understanding of the risks considered. There is a need to move from the understanding and implementation of regulatory and risk management requirements into derivation of business benefit.

Whilst firms must comply with risk reporting, they are equally driven by the need to reduce costs, increase automation and operational efficiency, improve the accuracy of their regulatory reporting and, ultimately, make better trading and investment decisions. In order to achieve optimal results while managing data spend, Leslie encourages firms to see that regulatory requirements are not necessarily a cost or inhibitor to growth, but are in fact a growth enabler. Adopting a proactive approach to the management of risk enables a firm to make growth-oriented decisions rather than focus purely on post-event mitigation decisions. (more…)

TechVision: Emerging trends in FinTech

Our latest TechVision, Emerging Trends in FinTech, was hosted by James Powell, CTO Thomson Reuters with a panel of startups in London. From cyber security and digital currencies to online marketplaces for lending, we explored their contributions to this booming FinTech marketplace in London and beyond. Our guests included: Sachin Patel, the Head of UK Capital Markets, Funding Circle, James Merrick, Head of Operations, Digital Shadows, Dr. Tom Robinson, co-founder and Chief Operating Officer, Elliptic. After each of the panelists talked about their companies and offerings, the conversation explored why London and why now.

All of the panelists agreed that technologies such as mobile, social, and the cloud provided platforms and opportunities to the financial marketplace, which was positioned for innovation. The support of the UK government in this space has been encouraging and welcome. All of the panelists mentioned that they had US involvement, either through investment or through offices in the States. Disruption and competition were important themes for each startup and they offered the following advise: Develop and invest in your brand, focusing on your unique offerings. Partner with other startups that complement your offerings and constantly watch the space for next generation disruptors.

Register for our next TechVision, which will celebrate women in technology and watch the videos from the event below: (more…)

Interview with Yang Du, Head of China Business Desk

As the discussion of the globalization of the Chinese economy and the rise of the Renminbi (RMB) continues to heat up, Yang shares his views on how other major currencies are likely to react in the near future.

Read more on our coverage of China.

The largest misconceptions about employee satisfaction

At Vancouver-based Talk Shop Media, formed in 2011 through a merger of two smaller public relations firms, the founders say they set goals early on around retaining staff. The company, which today has about 17 employees, has seen very little turnover and works hard to motivate and empower staff to grow with the business. “We wanted to make sure that the team that started with us understood that they could grow with us,” said Talk Shop principal and co-founder Sara Padidar. In addition to a mentoring program, Talk Shop hosts twice-annual staff town hall meetings where they talk about goals and open up the books to show how the money is being made and spent.

Read more about how your happy employee may not be the most loyal one.

Our time

As powerful technological, economic, regulatory and social forces present unprecedented challenges and opportunities to professionals around the world, Thomson Reuters enables our customers to act with confidence by delivering unparalleled breadth and depth of content, intuitive technology and insightful people.

Learn more in our 2014 Annual Report.

Governments to banks: Comply or else

When a government uses sanctions to keep rogue nations in check, or law enforcement agencies bust criminal cartels, they can usually thank a bank. Financial institutions may seem like an unlikely partner in crimefighting—but they actually play a crucial role in maintaining global security. But banks are growing more wary of their role in helping freeze or investigate suspicious channels in the global flow of money, and their caution could create fertile soil for even more crime—and more economic instability.

Read more about the bankers’ dilemma.

Mary’s story of war in South Sudan

Mary, her husband, and their nine children live in a camp for displaced people at a U.N. military base in Juba, South Sudan. They have been there since civil war between President Salva Kiir and his rival Riek Machar began in 2013. The government wants them to go home but Mary – like Machar a member of the Nuer tribe – refuses. She tells Thomson Reuters Foundation why.