In the first five months after the implementation of MiFID II, the Financial Conduct Authority noted that it received 3.2 billion transaction reports, spread over 23 transaction reporting entities. Such enormity of volume makes clear that automated processes are necessary for a sell-side firm to have rather than nice to have, and MiFID II, as part of a broader global movement toward more transparency in financial markets, prompted sell-side firms to make sizable investments in automating their middle and back offices.
Automating the middle and front office can connect ‘islands’ of processes, workflows and data, as well as improve trade processing operations, reduce costs, and better manage operational risk via data-driven insights. More and more firms are looking to managed integration solutions through an Integration Platform as a Service (iPaaS) to manage dozens of internal and external data flows.
By its often monotonous and repetitive nature, and the massive volumes of data and information that fall under its remit, compliance lends itself to machine-based solutions. Yet automating the compliance function remains a work in progress: according to a 2018 KPMG cross-industry research report, more than half of CCOs and CIOs had yet to automate compliance, but 90% of those same executives planned to increase automation funding in the subsequent few years.