3rd Party Products
In the early 1990s the third party trading application market was in its infancy. Banks were often forced to invest heavily in expensive and lengthy in-house development programmes because the products on the market were not always able to meet their business requirements. Unfortunately the long development cycles of these programmes meant it often took more time to deliver new functionality to the businesses and key technical and business resources were more likely to leave before key milestones were reached.
By the end of the 1990s a number of third party products had become firmly established in treasury, fixed income, derivatives and corporate lending business domains. These applications tended to be well-supported and early adopters of new technology. Banks and financial institutions were now able to implement third party products that would largely meet their business requirements with only the minimum of resources, thus eliminating the need for large in-house development teams.
With the changes in market behaviour that have come as a result of widespread use of electronic exchanges and e-business, banks have been reviewing their business operations and IT systems to position themselves better in the marketplace. Some of the focus of this current activity is around the cross-silo integration of front office businesses, where banks are expecting their trading applications to now handle trade capture, consolidated pricing and risk, and Straight Through Processing (STP) of complex structured products.At this moment in time the credit derivatives business is also experiencing a period of growth.