Integrating trade-related systems is a multifaceted challenge that typically spans more than a single budget cycle. In my previous post, I emphasized several crucial aspects:
- Know your goals clearly and precisely and track progress and attainment.
- Calculate potential ROI to justify your investment (we can help).
- Consider running standalone solutions initially and integrating later as it makes sense.
- Have success criteria for when operational and for when integration work can begin.
- Understand your data and how it will fit into your integration plans.
Not every aspect needs integration; each bank’s situation is unique. Institutions with lower transaction volumes may only automate specific processes. Assess your current landscape and identify opportunities for further integration.
Assuming your core DDA and Loan/Credit systems are already integrated, the next logical step is to integrate your core trade system with these. If you lack a trade system, you might be relying on manual processes or desktop solutions for LOCs—what’s your next move?
Focus Areas for Integration:
- Document Management: Streamline digitization, assimilation, compliance checks, and archiving.
- Compliance: Integrate with OFAC, AML, and other compliance frameworks.
- Payments and FX: Ensure seamless connectivity with Treasury and payment systems.
Some or most of your compliance can flow through your trade or doc checking systems. For example, Traydstream performs some compliance on its own but also easily integrates directly into solutions from Lexus Nexus, Lloyds Shipping, and a variety of OFAC and AML solutions. We also easily layer onto solutions from firms like Finzly to access their trade, FX, payments, and other capabilities.
The key here is finding solutions that easily and inexpensively integrate. Some vendor software does not even integrate well with other software the vendor sells; that means you have to do some really detailed due diligence before buying. One large vendor required the bank to stand up and maintain a dedicated VPN to make their payments and FX solutions talk with each other!
If you are replacing several solutions in your portfolio, you may want to run some stand alone at first until the final architecture is gaining focus. For example, you can purchase modules from Finzly one at a time and integrate them as you go. Many clients purchase Traydstream to run stand alone while the other projects are in play and then integrate as appropriate. This is a much better strategy than doing systems one at a time over many years. And it is much better than trying to do too much too fast. A major client of mine tried to do 10 IT projects at once. The CIO told the CEO who promised the board it could be done. There was no way. My firm was only one of the 10 but we and other project leaders could see the disaster. It cost the CEO, CIO, and others their jobs. Create an aggressive yet achievable plan for your system upgrades/replacement/additions.
Take Action:
- Define Your Integration Vision and Plan: Does it include priorities, multi-year spending, an aggressive yet achievable time line, and executive support?
- Stand Alone Options: Implement stand alone where it makes sense and integrate later.
- Explore Layering: Take advantage of solutions that can layer on top of other solutions with minimal effort.
- End Clients: How can you integrate out to your larger customers?
- Data Management: What happens to all the data, transactions, and supporting documentation when completed? You don’t want multiple sources to examine. How does this integrate to your storage strategy, for example Iron Mountain?
- Vendor Due Diligence: Thoroughly interrogate your potential vendors to understand how they integrate and what your bank has to do to make that integration happen.
- Act Now! Time is not on your side.
I and our integration team are here to assist you with any questions or discussions. Don’t hesitate to contact me. Until next time!
