Case study order management system banking luxoft for top10global investment bank
For more information about Luxoft, visitwww.luxoft.comwww.luxoft.com/financial-services/case studyOrder Management System for EquityDerivativesSummary13.09.2012Develop a pre-trading order management application that supports over-the-counter (OTC) and exchange-traded derivative (ETD) contracts, providesmanagement information related to the trades, and facilitates straight-throughprocessing (STP).uu Client: A top ten global investment bankuu Business Area: Multi-asset class trading, order management,front officeuu Asset Classes: Equity derivativesuu Technology Set: Java SE, Swing, Spring, Hibernate, Tomcat, JMS, TibcoEMS/Rendezvous, IBM MQ, RMI, REST, SOAP, FIXML, XSLT, Sybase, Oracle,JUnit, Shell scripts, TeamCityuu Integration: Markit Wire, RFQ-Hub, pricing tool, client’s data source,ETD/BClear source, Underlying source, risk database, ETD settlementsystem, revenue calculation service, authorization audit serviceuu User Profile: Sales managers and traders (40+ users)uu Geography: Europe, Japanuu Relationships Status: Ongoing ODC, T&Muu Services Provided: Full cycle: Business analysis, Development, QA/Testing, Maintenance with Production supportuu Team Size: 5 team membersuu Duration: 1 year
Business ChallengeIn order to take advantage of cost savings and process improvementopportunities, a global investment bank elected to automate its pre-tradeorder management and negotiation workflow. The system must bedesigned for use by sales managers and traders to support OTC, ETD andBClear trading using a variety of options and swaps, including vanillaoptions, combinations, options spreads and variance swaps. The high-levelrequirements for automation included order entry, price negotiation,hedging, and maintenance of all data attributes required to supportstraight-through processing.02Luxoft - Case StudyFigure 1:Pre-Trade OrderManagement andNegotiationWorkflowSYSTEMSALES TRADINGDOWNSTREAMSYSTEM(10) ENTER REMAINING DETAILS& CONFIRM TRADE(11) PUSH TRADE(2) PICK UP RFQ(3) QUOTE PRICE (4) PICK UP QUOTE(5) ENTER FURTHER DETAILS& ACCEPT QUOTE (6) PICK UP ACCEPTANCE(7) RETURN HEDGE (8) PICK UP HEDGE(9) CONFIRM HEDGE(1) ENTER RFQ DETAILS
03Luxoft - Case StudyLuxoft designed a solid and stable distributed system framework built uponmultiple Linux and Solaris boxes.The system employs thick-client architectureto exploit opportunities for rich functionality in negotiations and hedging.Theserver-side processes are based on Java technologies to gain the cost savingbenefits of portable, reusable code. Middleware services, based on RESTful,EMS, IBM MQ and RMI technologies, increase the level of service for transactionsin a secure manner. Lastly, integration between the bank’s internal and externalapplications was designed using XML over EMS, FIXML over EMS and SOAPtechnologies for maximum flexibility in a variety of message protocols.Figure 2:Pre-Trade OrderManagementFrameworkLuxoft Delivered SolutionWorking in close collaboration with all stakeholders, including third-partyrepresentatives, the Luxoft development team collected requirements,analyzed the gaps, and established the approach for controlling the projectlifecycle from requirements specification to application deployment.To ensure the highest quality product, the Luxoft team organized continuous,regular communications with business representatives to maintain currentpriorities, verify functionality, and raise visibility to the project status.Luxoft’s development team designed a system that met all of the high-levelrequirements of the business and exceeded expectations by rewriting severallegacy system components, performing technical migrations, and upgradingthird-party application interfaces. The application is seamlessly integratedwith multiple internal and external systems, both inbound and outbound.In addition, the system supports dedicated reconciliation processes withreporting to facilitate the identification of missing, invalid or incomplete data.NMARKITWIRECLIENTRFQ-HUBGUIPROCESSESWEBULSDBsFEEDSOUTFEEDSINNN
03Luxoft - Case StudyCustomer FeedbackBenefitsBy establishing a sound project approach and a culture of transparentcommunications, Luxoft was able to deliver the application on time andwithin budget.The new order management system has remained stable, withoutunscheduled outages, thus substantial decreasing operating costs andavoiding the incremental costs of unscheduled downtime.The automated workflow provides the benefits of improved productivity,increased compliance, greater agility in trading, and the costs and revenuebenefits of process improvement.Detailed feedback is available on request.