Misys modular back office service will streamline and consolidate

Banking software vendor Misys has launched a modular back office service that it says will centralise and consolidate all processing across asset classes, trading systems and branches globally. 

The Misys Global Back Office tool is designed to streamline back office operations for users and improve STP rates, so that banks can achieve lower costs and reduced risk. It covers connectivity to central counterparties, trade repository and cross-asset collateral and margin management, and includes integration with counterparties, brokers and clearers. It is being offered as part of Misys Capital Markets Fusion, the firm’s modular core banking platform.

“Our strategy is growing business components, not replacing existing systems,” said Joeg Heidtman, head of capital markets product management at Misys. “We recognise that clients want to reduce their costs, their risk and inconsistency. There is strong demand for centralising the back office and that’s what this is about.”

According to Heidtman, Misys is offering ‘granular’ consumption-based prices, so that customers can use its services in any combination and just pay for the modules they want. Messaging and confirmation come as basic, but there are also accounting, collateral management, reporting, connectivity and netting services available as optional modules.

“We’ve had good feedback about the module approach,” he said. “We are really helping to bridge the gap between trading and the back office.”

Misys is targeting the product at both tier two and tier one banks that have typically already invested in three or four systems and may not find a ‘rip out and replace’ approach suitable. At the same time, the firm insists it can help to break down silos within a business.

The first bank to use the product is Canada’s Maple Bank, which will deploy it in Canada and Germany. Misys said several other existing customers have agreed to use it as part of their global expansion into Asia and Europe.

“Misys Global Back Office, we believe, will allow us to centralise and consolidate all operational processing across our branches and subsidiaries,” said James Leach, chief operating officer of Maple Bank. “We expect to see a real impact on our business as a result, with significant cost savings, more streamlined operations and improved straight-through processing.”

Meanwhile, a survey of transaction banks, released by Misys at Sibos, found 69 per cent of respondents cited operational inefficiencies as a barrier to growth in core businesses. These inefficiencies appear to be most severe in payments processing, where 84 per cent of respondents said improvement in this area was a top priority.

The survey states that banks are striving to satisfy corporate demands, but are hampered by operational inefficiencies and low levels of automation. While unified cash, trade and payments was seen as key to growth, 75 per cent said rolling out unified services in new regions was difficult and a barrier to growth.

Misys surveyed 107 professionals in the trade finance, payments and cash management industry globally, evaluating the state of the global transaction banking industry and the opportunities for improvement and growth.

“Banks are looking to capitalise on core business lines before extending new value-added services in transaction banking, such as real-time payments services and supply chain finance programmes,” said the survey. “While marginal growth is coming from new ventures to offer these services, the biggest growth is expected to be seen in unleashing the potential of more automated payments, being able to streamline trade finance processing and offering more unified online channels for corporate transaction banking across trade, cash and treasury functions.”

Regional differences in the potential for growth and demand for transaction services were also detected in the survey results. More than one third (36 per cent) stated that they regarded the Asia Pacific region as having the highest growth potential, while 30 per cent said Europe was their main focus for growth.

Finally, Misys has signed a partnership agreement with Swift whereby the company will increase its use of SwiftRef reference data across its entire banking application portfolio.