A chequered ride

Capital Markets have experienced significant evolution in recent times. Advancements in technology, increased regulatory demands, transition to more complex trading products, newer asset classes and geographies have all contributed to this overhaul. While the front office has traditionally been in the spotlight and received much of the budget and resources, the markets middle office, which is the lynchpin in post-trade operations has not got the attention it deserves.

The middle office has largely experienced disorganised expansion stemming from business growth and regulatory burden. Its multiple siloed systems and redundant processes, requiring a large workforce, have led to cost pressures, and shrinking profits.

In the current high-cost, low-margin environment, a leaner middle office is imperative for a competitive edge and to support the increasing demands of today’s business landscape.

CRISIL is releasing a series of publications covering the transformation journeys of firms in this space, including resolution of day-to-day challenges, latest regulation that is driving the transformation, and implementation of additional controls. In the anchor paper of this series, we discuss the catalysts, challenges and way forward for middle-office transformation.