Jun 21, 2022


Our client's use of derivatives has increased significantly over the last several years and is expected to continue to grow both in terms of volumes and complexity. The core of its operating model is built around BRS' platform Aladdin, along with a heavy reliance on Microsoft Excel. Trading and operations teams have introduced several vendor technology solutions to support derivatives processing, including MarkitWire, GTSS, TriOptima, and Acadia. Besides adding technology, the operations team has adapted workflows and organizational structure as a reaction to the complex derivative environment. ​

The client engaged Cutter to help assess the current derivatives support environment along with the systems and tools used to support derivative processing. Additionally, based on the current-state assessment, business process mapping, and a targeted peer analysis, Cutter provided a document focused on future-state recommendations and areas for improvement covering organizational structure, organizational governance, business processes, and technical support and system functionality. We also prepared a roadmap for proposed project areas, as well as supporting business case materials.​

Cutter Solution

Our discovery process involved meeting with business and technical support staff to examine processes, systems, tools, organizational structure, and skill sets. Detailed business process mapping of 11 discrete business process across different derivative instrument types (Futures, FX, Bilateral & Cleared Swaps), exposed opportunities for process efficiency and the existence of many supplemental End User Computing tools (EUCs) to support Aladdin functional challenges (significantly more than the client’s Aladdin peers). ​

We offered 22 recommendations wrapped into the following six themes: ​

  • Improve the operational governance framework by developing robust automated business operating metrics, enhance existing vendor management & technical enhancement practices, and better leverage BRS' expertise​
  • Improve onboarding transparency by developing new onboarding criteria to ensure that the impacts and challenges of custom/bespoke processing requirements are understood​
  • Introduce operational efficiency projects, while increasing project capacity by expanding business and technical project teams​
  • Ensure regulatory reporting data integrity and compliance: enhance the collaboration between internal teams and implement technical enhancements to help collect data and format reporting​
  • Enhance the global support model with regional teams to support trade operations and confirmations, and take advantage of centralized offshore processing teams, which can better leverage the global clock​
  • Realign, consolidate, and refine the derivative operations organization to optimize talent and efficiency across the teams ​

Cutter proposed the client partner with BRS to pursue a targeted improvement initiative to address current system challenges, improve inefficient workflows, and better manage future needs before evaluating best-of-breed supplemental tools.​

A roadmap was provided to offer a high-level overview of projects with supporting business cases to help assess benefits such as efficiency gains and reduced operational risk, while helping to detail project costs, timelines, resource requirements, and risk factors.​