Capital market firms need to reduce costs. Many firms are looking for ways to preserve their margins and use their capital most efficiently by analysing and managing their expenses carefully. That means dealing with trade execution costs, which are one of the largest expense items for capital market firms.
The profusion of products, exchanges, brokers, clearinghouses and other participants, along with faster digital trading and execution, has resulted in a growing volume of invoices for trade execution expenses. This has strained many capital markets firms’ in-house systems, leading to uncertainty over the accuracy of the invoices.
Margin compression and the drive for efficiency have firms seeking new ways to address the complexities associated with validating and reconciling vendor fees. The challenges faced in terms of fees include asset valuation after distribution, AUM segregation, application of commission rates/tiers/discounts, a range of other complications.