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10 June 2024

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Combining innovation and alliance: Comyno鈥檚 securities finance strategy

The industry is under tremendous pressure to adapt to an ever-tightening regulatory environment, according to Frank Becker, COO of Comyno, who dissects the challenges currently facing the market

Within the complex interplay of the global financial markets, the securities finance sector performs a pivotal role. But as the tempo increases, so does the complexity of its movements. Today鈥檚 landscape is fraught with an array of challenges that test the agility and acumen of financial institutions worldwide.

We find ourselves at a crossroads, where regulatory requirements, operational efficiencies, and technological innovations converge. This juncture is critical 鈥 it beckons a significant shift in how securities finance operates, demanding solutions that are as flexible as they are robust. To stay afloat and thrive, firms are required to harness both the innovation within and strategic partnerships without. Comyno, with its C-ONE platform and a history of alliances like the one with SWIAT, stands as a paragon in this dual approach.

Founded almost two decades ago, Comyno pivoted from a specialised consulting firm into a software development boutique for the securities finance industry. Its unique combination of strategy, business and IT expertise found its purpose in the creation of Comyno鈥檚 modular trading software C-ONE.

Private and public financial institutions, asset managers and clearing houses, all trust Comyno鈥檚 services and products. Further development and expansion are managed by its founder Markus B眉ttner, Admir Spahic and Frank Becker.

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Dissecting industry challenges

Navigating the complexities of securities finance in a shifting regulatory landscape, Comyno COO Frank Becker articulates the pressure points. He says: 鈥淭he industry is under tremendous pressure to adapt to an ever-tightening regulatory environment. Metrics such as the Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), and the Securities Financing Transactions Regulation (SFTR) represent just the tip of the iceberg.鈥

These regulatory frameworks are not static but evolving, with each iteration demanding more from financial institutions in terms of transparency, reporting, and risk management.

Adapting to existing market infrastructures while simultaneously assimilating new technologies such as distributed ledger technology (DLT) and blockchain, is a parallel challenge. This technological integration is no longer an elective enhancement but an imperative transition, as these emerging fields promise enhanced transparency, efficiency and security.

Operational efficiency is paramount. Amid a maze of legacy systems and assorted software platforms, firms face the colossal task of maintaining 鈥榖usiness as usual鈥 while transitioning to more sophisticated, streamlined processes. Manual interventions, often cumbersome and error-prone, are being challenged by the need for automated, reliable systems.

Becker emphasises the magnitude of this transition: 鈥淥perational aspects around 鈥榬unning the bank鈥 鈥 which involves managing day-to-day operations, while also coping with legacy systems 鈥 remain a significant hurdle.鈥 The industry鈥檚 elephant in the room, as Becker mentions, is the shift towards a T+1 settlement cycle. This transition will compress the post-trade processing window dramatically, urging firms to accelerate their operational cadence while maintaining accuracy and compliance.

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C-ONE: a modular approach to securities finance

In response to this multifaceted environment, Comyno鈥檚 C-ONE platform brings forth several innovations. As a multi-dimensional solution, C-ONE addresses the core needs of securities finance, enveloping SLB, collateral management, regulatory reporting, and blockchain technology into a single, potent source.

One of C-ONE鈥檚 utilities is the Locates Manager. This tool pre-processes locate requests from multiple channels, presenting them in a standardised format that is easy to interpret. By automating replies and booking trades, it aims to curtail the manual effort typically involved in these operations, thereby trimming response times and enhancing overall efficiency.

The Locates Manager is adept at improving lenders鈥 inventory utilisation, says Becker, amplifying revenue while also boosting the chances for entities to find the securities they seek. It is an installation that does not necessitate a cumbersome system overhaul, instead offering immediate benefits with minimal integration effort.

Comyno鈥檚 one-stop-shop approach consolidates securities lending, repo, and collateral management for both traditional and digital assets, Becker explains. It exemplifies a seamless merger of multiple finance realms under the C-ONE umbrella, streamlining what was once a segmented and unwieldy set of processes.

C-ONE stands as a hybrid platform, a nod to its combined capabilities of managing in-house trading and collateral across multiple entities and product types. Its web-based access points allow for client and counterparty connectivity, including white-labelling options, ensuring a personalised and expansive service reach.

Position sharing, locates management, affirmation processes, and exposure to trading activities and collateral management, are all facets made transparent and accessible to stakeholders. Even the platform鈥檚 PnL features extend to all entities involved, underlining the depth and flexibility of C-ONE鈥檚 reach.

The myriad of internal and external parties, software systems, IT components, and manual workarounds, are significant cost drivers in securities finance. Comyno鈥檚 C-ONE platform, with its modular design, directly addresses these inefficiencies. By offering an extensive suite that covers the entire value chain, both commercially and technically, C-ONE is designed to provide a streamlined, cost-effective solution.

Reflecting the diverse needs of its clientele, C-ONE is available both on-premises and as a software-as-a-service (SaaS) model. This dual offering ensures that firms can tailor the platform鈥檚 integration to their specific operational landscapes, whether preferring a localised control or seeking the agility of a cloud-based solution.

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The essence of living partnerships

Comyno鈥檚 philosophy extends beyond its technological prowess, recognising that strategic partnerships, as exemplified by its collaboration with SWIAT, are fundamental to address industry-wide issues. Such alliances are not just about enhancing product offerings but about fostering a culture of shared expertise and common goals.

Frank Becker recognises that the value of a partnership lies in its execution. 鈥淚t is imperative that our strategic alliances are not static entities on paper. They must be dynamic, living systems that provide tangible technical solutions to our customers,鈥 he asserts. This philosophy is at the heart of Comyno鈥檚 approach, where partnerships are nurtured through the integration of sophisticated technologies and the development of shared platforms that actively simplify and enhance client processes.

The Comyno-SWIAT partnership showcases a blend of Comyno鈥檚 software solutions with SWIAT鈥檚 technological strengths, resulting in a service that exceeds the sum of its parts. This collaboration serves as a model for how Comyno intends to approach and establish future partnerships.

The road ahead

As Comyno continues to tackle the issues facing the securities finance industry, it does so with a keen understanding that the future lies in innovation paired with strategic collaborations. The upcoming initiatives and partnerships are poised to build upon past successes, leveraging collective expertise to address the evolving challenges of the market.

The combination of cutting-edge technology and synergistic partnerships has consistently proven effective in addressing complex challenges within the industry. Comyno鈥檚 dedication to innovation, flexibility, and collaborative progress heralds not just evolution but a potential revolution in the securities finance sector.

Adding to this vision, Becker hints at exciting developments on the horizon: 鈥淎s we stride forward, our focus on living out the partnerships we create has never been more vital. We are not just preparing for the future 鈥 we are actively crafting it with our alliances. Stay tuned for an upcoming announcement where we will unveil a new strategic partnership, setting the stage for unprecedented innovation and cooperation in the industry.鈥

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