Duco for Capital Markets

Front Office to Back Office (FOBO)

The ability to trace every transaction made in a bank’s front office operations through to its back office systems is vital to managing financial and operational risk. Traditionally firms find it difficult to accurately reconcile this data, due to the number of different systems and formats it passes through.

When speed and accuracy are vital, Duco delivers. With Duco, operations teams can set up reconciliations between systems quickly, helping customers to keep data integrity from front to back. Our flexible ingestion technology means firms can upload different data types and formats with little or no transformation. And with our unique self-service platform, you can have validation checks ready in hours

ETD / OTC CLEARING

Regulation mandates that all eligible derivatives, both ETD and OTC, are cleared through a CCP. But providing timely reconciliation across multiple products, multiple CCPs and regions with different jurisdictional requirements is no easy task.

With Duco, you can decrease the time-to-market of the reconciliation build, improve control by eliminating manual processes and increase efficiency by merging several existing reconciliations into one. Over 50 clients are currently using Duco for their OTC and ETD reconciliations, ranging from tier 1 investment banks through to asset managers, brokers and smaller hedge funds.

For more information, download our guide to ETD/OTC clearing with Duco.

BROKER RECONCILIATION

Trades, positions, fees, commission – all need to be reconciled regularly and accurately with your brokers to make sure there are no discrepancies. However, there can be very different data standards between brokers, particularly when dealing with derivatives. Often data will arrive in different layouts, different formats and using different naming conventions. Legacy reconciliation solutions usually aren’t able to handle this effectively, and operations teams need to resort to spreadsheets.

Duco is an agile solution, that empowers operations staff to set up bespoke reconciliations from scratch extremely quickly. Our flexible technology means you can ingest multiple types of data from multiple brokers, normalise it without code, then reconcile that data against your internal systems, with little or no prior data transformation. With Duco you can quickly remove manual work and spreadsheets, no matter what the quality or format of the data looks like.

CUSTODY RECONCILIATION

The separation between trading participants and custodians exists to protect customers from theft or fraud. Unfortunately, it also creates a data disconnect. Traditionally, financial organisations set up custody reconciliations by performing an extract, transform, load (ETL) exercise. This manipulates all the data into one consistent format before reconciliation takes place. It’s often an arduous and resource-heavy operation and needs to be undertaken by skilled technical staff to avoid the risk of error.

With Duco you can eliminate ETL processes. Duco can ingest, cleanse and validate multiple data in its raw format regardless of which platform it originates from, with little or no prior transformation. From there, operations staff can set up reconciliations quickly using our unique Natural Rule Language – no need for code! With Duco, custody reconciliation is fast, accurate and efficient.

SPREADSHEET REPLACEMENT

Despite great advances in the ability to sort and manage data, Capital Markets firms are still reliant on vast quantities of spreadsheets and manual work. This is due to dependencies on inflexible legacy technology, alongside a lack of consistent data standards across the industry. The result is firms are relying on expensive, ageing systems to reconcile simple stock or custody data, while employing spreadsheets as soon as they encounter anything complex or bespoke.

There is a better way! Duco is as easy to use as a spreadsheet, but fundamentally more flexible, scalable and auditable. Our intelligent, self-service technology means you can ingest multiple types of data with little or no prior transformation. Non-technical users who understand the data, can then set up automated controls within hours, using English sentences – no code required.

COLLATERAL

When dealing with multiple asset classes, including complex instruments, the ability to reconcile and manage margin disputes, reconcile trades, and manage collateral is essential to limiting risk. Collateral data is typically stored in a risk management or portfolio management system, but with a heavy reliance on manual processes and spreadsheets.

Duco is a highly flexible system able to handle all of your derivatives and collateral reconciliation. Duco’s unique data ingestion technology means you can upload multiple types of data, with little or no transformation, and the system will automatically start recognising relationships in the data. This is especially useful in the collateral management space, where assets do not have widely adopted symbology and reconciliation efforts are traditionally arduous.

Regulatory Data Integrity

A robust data integrity framework is essential for accurate regulatory reporting, but getting one in place is not easy. There are a host of different regulations that firms need to adhere to in different jurisdictions, often with shifting requirements. Ensuring accuracy in these circumstances is beyond most traditional reconciliation tools.

Duco represents a new type of data integrity solution, empowering regulatory experts to set up checks and controls extremely quickly between many different types of system. Our flexible technology means you can pull data together from multiple sources, then normalise and reconcile it, with no need for coding or major technology projects. Any errors are then automatically assigned to users or groups for investigation based on parameters you define. Nothing slips through the cracks.

IBOR transition

For more than 40 years, the financial services industry has been underpinned by interbank offered rates (IBOR) – but this is set to change. The IBOR benchmark is being phased out by the UK and US, to be replaced by alternative reference rates (ARR) by the end of 2021. Many other nations are expected to follow suit.

Duco’s next generation data integrity platform can be quickly deployed to help Capital Markets firms identify, extract and process the information they need – and ensure a smoother transition from IBOR to ARR. For more information, download our guide.