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[ M A R K E T R E V I E W | F O R E I G N Richard de Roos, head of FX at Standard Bank, believes his ‘modular’ approach to updating legacy systems has paid off. He explains it can be difficult for large sell-side firms to buy off-the-shelf, new systems as they could very well be considered legacy within six months. “It’s difficult for legacy systems to hold big data and analytics, and provide accurate information.” MPUMI MAKHUBU, MANAGER, EFX, PRODUCT, STANDARD BANK “What we try to do is have legacy systems in place that are newer than other systems. It’s not proprietary, it’s from a vendor that provides regular updates on an aggregated basis to ensure we are best of breed in most cases,” Roos explains. “On top of that, we are very aware that we do not know where the technology evolution is heading. We need the agility to make sure we aren’t backed into a corner and buy a system that becomes ‘old-school’ legacy in six months’ time. “With that approach we are switching the costs in terms of moving from one vendor to anoth- er on a modular basis, rather than approaching one vendor with all of our system requirements. That has really paid off for the FX business at Standard Bank.” Roos adds that systems are regularly and rigorously checked as part of a review process ap- proximately every six months to ensure the FX business at Standard Bank has sufficient agility in the way it is set up to make changes if necessary. The trick for large FX institutions, he concludes, is making everything modular and 60 // TheTrade // Summer 2018 E X C H A N G E ] API applicable, without breaking stability - but this has its own risks. “The other side of the argument is that if you are too modular and you have the need for low latency, it can have the opposite affect and cause instability,” Roos says. “It’s difficult and there are risks, but banks need to evolve and remain wise about the decisions they make rather than being impressionable to stay ahead of the game.” Other banks have taken a slightly different approach to legacy system upgrades. In February last year, for example, Crédit Agricole Corporate & Investment Bank (CIB) decided to replace its legacy systems for FX trading through a partnership with Orchestrade Financial Systems. All front-to- middle office processing of vanilla and structured products from two legacy platforms were overhauled and migrated to Orchestrade’s platform. Global head of the trading divi- sion at Crédit Agricole CIB, Thom- as Spitz, said at the time that the overhaul meant the business was able to improve risk performance, keep up with new regulatory changes and reduce costs. Post im- plementation, Orchestrade added that the bank has seen improved efficiency alongside one consistent platform used by the sales, trading, risk and operations teams. Connectivity and liquidity Achieving low latency connectivity to various global FX venues and the data that those connections accumulate remains one of the biggest challenges for large FX firms. Alina Karpichenko, global marketing manager at IT infra- structure provider Avelacom, says the vendor works with a number of institutional trading firms and is seeing an increased demand for