The MiFID opportunity
Deadline is fast approaching...
There are plenty of MiFID tools on offer but the first step, from an IT point of view, is to get your head around what MiFID is and how your firm and your national regulators are interpreting it.
There is a tool that may help you do this, from Fintecs: the MiFIDMap Workbench. Fintecs MD Toby Gratton explained that this is a Visio-based visualisation tool that distils the actual directives into a more readable, structured form that can easily be navigated by compliance officers and which maintains hyperlinks back to the directives themselves. Keyword search is available and reports can be exported to the usual Microsoft Office applications via XML; but perhaps its most useful feature is a map can be user-customised with links to an organisation's own processes and compliance progress.
The Workbench isn't cheap (some £4,500), but it is intended for compliance officers; a "Reader" is available (just under £1,500) for managers and other stakeholders to use in order to track their compliance schedules (trial versions are available for download). And Fintecs can also print wallchart versions of your MiFID compliance map to help encourage everybody forwards.
MiFID Workbench is part of a general Microsoft MiFID support initiative (see the Microsoft Financial Services press release here, which involves not just Microsoft stuff (Office, BizTalk, Sharepoint, SQLServer etc) but other partners too: as well as Fintecs, there is HP and Progress Apama, for example.
A welcome sign of the maturity needed to be a major financial services player rather than just a supplier of really powerful (and possibly unmanaged) spreadsheets and C++ compilers (although that is probably a tad unfair to Microsoft these days).
A key feature of any MiFID solution will be some kind of real-time data store capable of going back over five years in a time sequence. Mark Palmer (vice president and general manager of the Apama Division of Progress Software) says this is a key strength of the Apama compliance event-processing platform (which is already proven in algorithmic trading).
As Palmer puts it: "The Event Store is a subatomic data warehouse from which questions concerning past "best execution" and the like can be answered."
But, as I said, most financial services technology vendors will have a MiFID story if you ask for it. It is, however, a case of "buyer beware" as not all technology will meet the potential demands of MiFID.
Gavin Quinn (business development manager finance EMEA at Sybase), for example, points out that many conventional databases are not good at near-real-time processing of large volumes of time-series data; not surprisingly, Sybase claims to have a solution (check out its Risk Analytics Platform here).
However, there is more to MiFID than technology. Gratton stresses that Fintecs is more than just a software vendor; it is also a financial services consultancy with extensive European experience in business process improvement.
Well, perhaps that is to be expected, but the fact remains that MiFID compliance may well be as much to do with process management and improvement as it is with technology. It is all about transparency, good record keeping, and operating on a level playing field with European competitors. If your process can't cope with this, new technology probably won't cover for it.
And if your MiFID project fails, I bet it will be more to do with a failure of project management, or a failure of the business to deal with EU regulation effectively, than it will be to do with technology failure.
Perhaps some companies will need experienced external assistance. ®