Software as a Service in Finance - PowerPoint Presentation.ppt

1、Software as a Service in Finance,Date: 15 May 2007 Produced by: Chris Swan,The materials may not be used or relied upon in any way.,Agenda,What is a service anyway? Services that banks use Services that banks sell Bank 2.0? The hard part SLAs Questions,What is a service anyway?,http:/en.wikipedia.or

2、g/wiki/Service In economics and marketing, a service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership, and this is what differentiates it from providing physical goods. It is claimed to be a process that creates be

3、nefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. /wiki/Software_as_a_Service The key characteristics of SaaS software, according to IDC, include network-based access to, and management of, comme

4、rcially available (i.e., not custom) software activities that are managed from central locations rather than at each customers site, enabling customers to access applications remotely via the Web application delivery that typically is closer to a one-to-many model (single instance, multi-tenant arch

5、itecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics. /wiki/Service_(Systems_Architecture) OASIS (organization) defines service as a mechanism to enable access to one or more capabilities, where the access is provided

6、 using a prescribed interface and is exercised consistent with constraints and policies as specified by the service description.,Services that banks use Market Data,Exchange,Exchange,Exchange,Market Data Provider,Customer,Customer,Customer,Services that banks use Exchanges,Exchange,Customer,Customer

7、,Customer,Customer,Customer,Customer,Services that banks sell Prime services,/wiki/Prime_brokerage Prime Brokerage is the generic name for a bundled package of services offered by investment banks to hedge funds. The business advantage to a hedge fund of using a Prime Broker is

8、 that the Prime Broker provides a centralized securities clearing facility for the hedge fund, and the hedge funds collateral requirements are netted across all deals handled by the Prime Broker. The Prime Broker benefits by earning fees (spreads) on financing the clients long and short cash and sec

9、urity positions, and by charging, in some cases, fees for clearing and/or other services. The following core services are typically bundled into the Prime Brokerage package: Global custody (including clearing, custody, and asset servicing) Securities lending Financing (to facilitate leverage of clie

10、nt assets) Customized Technology (provide hedge fund managers with portfolio reporting needed to effectively manage money) Operational Support (prime brokers act as a hedge funds primary operations contact with all other broker dealers),Services that banks sell Prime services,Hedge Fund,Hedge Fund,H

11、edge Fund,Exchange,Clearing,Settlement,Bank,Trading,Position keeping,Clearing And Settlement,Prime Services,Services that banks sell Algorithmic trading,/wiki/Algorithmic_trading In electronic financial markets, algorithmic trading, also known as algo, automated, black box, or

12、robo trading, is the use of computer programs for entering trading orders with the computer algorithm deciding on certain aspects of the order such as the timing, price, or type (market vs. limit, or buy vs. sell) of the order. It is widely used by pension funds, mutual funds, and other institutiona

13、l traders to divide up a large trade into several smaller trades in order to avoid market impact costs or otherwise reduce transaction costs. It is also used by hedge funds and similar traders to make the decision to initiate orders based on information that is received electronically, before human

14、traders are even aware of the information. Algorithmic trading may be used in any market strategy, including market making, intermarket spreading, arbitrage, or pure speculation (including trend following) to make the complete decision on entering trades and electronically executing the trade with n

15、o human intervention, other than in writing the computer program. In 2006 at the London Stock Exchange, over 40% of all orders were entered by algo traders, with 60% predicted for 2007. American markets and equity markets generally have a higher proportion of algo trades than other markets, and esti

16、mates for 2008 range as high as an 80% proportion in some markets. Foreign exchange markets also have active algo trading (about 25% of orders in 2006). Futures and options markets are considered to be fairly easily integrated into algorithmic trading, and bond markets are moving toward more access

17、to algorithmic traders.,Services that banks sell Algorithmic trading,Hedge Fund,Mutual Fund,Hedge Fund,Exchange,Exchange,Exchange,Bank,Algorithmic Trading System,The Bank as a service bundle,Client,Client,Client,Exchanges,Clearing,Settlement,Bank,Equities,Derivatives,Fixed Income,Reference Data,Vali

18、dation and Enrichment,Risk Management,FinancialControl,Clearing and Settlement,Bank,Service cloud,Bank 2.0?,Client,Client,Client,Exchanges,Clearing,Settlement,Equities,Derivatives,Fixed Income,Reference Data,Validation and Enrichment,Risk Management,FinancialControl,Clearing and Settlement,The SLA c

19、hallenge is it for the person or the machine?,+ Ambiguity - Detail, process,- Ambiguity + Detail, process,SLAs work just like any other piece of software,From the classic waterfall process (or SDLC+): Initiation (Concept)If we are going to have a system then we will need an SLA Requirements definiti

20、onIdentify at a coarse level what the parameters covered by the SLAwill be System and software designDetermine high level metrics (key performance indicators) then refine to get specific metrics Implementation and unit testingThis creates and verifies the functional parts of the SLA Integration and

21、system testingAt this stage it should be possible to validate that the non functional aspects are achievable Deployment / maintenanceEnsure that the system performs within the SLA and respond to exceptions EvaluationDoes the SLA actually represent the service to fit the business need that drove the original concept?,These stages are where efforts are typically fo