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A recent Broadridge report highlights that the financial services industry spends between $17b and $24b per year on core post-trade processing, reference data, reconciliations, trade expense management, client life-cycle management, corporate actions, tax and regulatory reporting. The report suggests that an agreed upon utility model with full support is the best path forward, curiously they don't mention anything about blockchain technologies.
The main attraction for a utility model is cost, whereby banks have become increasingly pressured to cut costs as a result of regulation. The report highlights that the finance industry spends between $17 billion and $24 billion per year on core post-trade processing, reference data, reconciliations, trade expense management, client life-cycle management, corporate actions, tax and regulatory reporting. A utility model is being increasingly explored in the derivatives market. In June SunGard went live with a new outsourcing clearing utility for futures and OTC derivatives, with Barclays as its first client. Furthermore a number of banks and market infrastructures have cooperated in the creation of a swaps margin utility.
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