SmartStream: Revamping the Post- Trade Environment

Haytham Kaddoura, CEO The repercussions of the 2008 financial crisis are still evident today. While the financial services industry has certainly bounced back in many ways, they still struggle when it comes to increasing their margins while staying nimble. Many financial institutions barely recovered their cost-of-capital after what has been almost a decade of post-crisis restructuring, outsourcing, and cost-cutting. “Under the stringent regulatory environment financial institutions currently operate, it has become increasingly difficult for them to generate profits,” comments Haytham Kaddoura, CEO, SmartStream. One of the ways these banks and asset managers have tried to increase margins is to outsource middle-and back-office processing operations. An important addition to the landscape is the SmartStream Reference Data Utility that is at the forefront of the mutualization models currently being offered. Through the combining and cleansing of reference data, banks can save on the cost of mutualizing the data, operations and all associated fees. As the players in this sector turn to newer operating models in the form of these new process utilities, SmartStream is catering to this change by delivering solutions for not only reference data, but also reconciliations, corporate actions, invoice management, and cash and liquidity management. “We have been at the forefront of middle- and back-office processing, and our core banking solutions have been implemented in 70 of the top 100 banks; bringing greater control to all aspect of the transaction lifecycle,” informs Kaddoura. “We can also oversee an institution’s regulatory challenges, freeing them to devote more resources on profitability.”

Having begun a transformation in early 2016 with the appointment of Kaddoura as CEO, SmartStream is on a mission to continue what they have always done well, automate and streamline manual post-trade processes in real-time, while rededicating themselves to a renewed focus on their core solutions and to even greater collaboration with their customers and clients. With a clientele ranging from buy-side traders to sell-side brokers and custodians, the firm collaborates with leading financial service providers, helping them implement volume insensitive, instrument agnostic Straight-Through- Processing (STP) solutions that deliver control to their transaction lifecycle. “Today, ‘the SmartStream Promise’ assures the effective delivery of better trade process management solutions, more efficient deployments and a low-cost of ownership for our clients, in addition to addressing their needs in a more strategic manner,” says Kaddoura. “This is SmartStream 2.0.”

SmartStream’s extensive suite of STP workflow solutions has been branded under Transaction Lifecycle Management (TLM) Platform, to offer financial institutions with unparalleled operational control for back-office operations in addition to regulatory compliance and proactive risk management.

We can also oversee an institution’s regulatory challenges, freeing them to devote more resources on profitability

“Our TLM solutions and managed services enable greater automation and control for critical post-trade operations—reference data operations, trade process management, cost management, and compliance processes,” states Kaddoura. Available as a fully managed web-service, TLM OnDemand offers data back-up, full business continuity, software upgrades, and testing features that guarantee sustained operations. Meanwhile, the on-premise version of the TLM platform integrates seamlessly with legacy systems for both upstream and downstream processing.

Standardizing from a Utility Perspective

A data-driven utility, based on the principles of collaboration and contribution, SmartStream RDU offers a shared service model for holistic management of data during the data processing phase across the entire instrument lifecycle. The SmartStream RDU also serves as a processing agent for its participants’ data sources to manage their complete data lifecycle, incorporating sourcing, validation, enrichment and cross-referencing of data. SmartStream’s instrument agnostic STP approach reduces operational risk by automating manual and paper-based systems as the life cycle of instruments is kept agnostic in accordance with the back-office functions. “For instance, reconciliations can be performed against different data sources because TLM normalizes data during the loading process,” adds Kaddoura. Applying a rules-based escalation and utility model, the TLM solutions offer core capabilities that solve complex processing requirements across the back-office while safeguarding clients’ investments. On one occasion, a U.S. based clearing house implemented the SmartStream Reconciliation solution which enabled their member banks to review and determine the attributes that were causing transaction breaks.

On the frontline of post-trade processing, SmartStream’s Trade Process Management solution offers integration and enhanced operational control in a post-trade environment. The company’s TLM is a workflow-based software that lowers operational risk while providing an audited view of all trade activities— deal capture, allocation, confirmation, and settlement—and greater operational flexibility and scalability across a diverse range of instrument types. For instance, TLM Trade Process Management for OTC Derivatives addresses the post-trade allocation, affirmation/ confirmation, settlement, and lifecycle asset servicing needs of financial institutions in the global securities markets.
Delivering Control to the Transaction Lifecycle

“Financial services firms often struggle with the management of variable expenses as it significantly impacts their profitability,” says Kaddoura. SmartStream’s TLM Fees and Expense Management solution has been developed with a focus on driving savings to the bottom line and enhancing profitability. It empowers financial services firms to use an end-to-end automated process that accurately substantiates their variable expenses within large amounts of transactional data. “We provide the ability to manage rate cards, approve commissions against approved rate cards, and provide expert guidance on where to spend,” he states.

Additionally, to support the ever-increasing use of collateral within the financial services community, SmartStream delivers a TLM Collateral Management solution that provides coverage for cleared and non-cleared Over-The-Counter (OTC) Derivatives Margining, Repo Margining, and Securities Lending Margining. “Our TLM Collateral Management solution streamlines back-office workflow, and supports automation of tasks associated with margin call processing, data capture, validation, and calculation processing,” emphasizes Rocky Martinez, CTO, SmartStream.

Paving the Way Ahead

Actively working with its partners to accommodate their requirements, SmartStream continues to align its solutions in that direction by investing substantially in R&D. “Everything we do is purpose-built as we believe in growing organically by developing solution sets from the ground-up,” says Kaddoura. “Our innovation lab is where we huddle up to evaluate our unique resources, prognosticate on the technological developments, and build scalable processes for real-time visibility and control.” With a seamless transferring process of know-how within the organization, the SmartStream crew is always prepped to face new regulations and requirements. Kaddoura credits SmartStream’s strong business know-how to a talented team of experts with extensive experience of having worked with financial institutions. The company’s delivery of the latest technologies with a low-impact approach provides clients with closely-integrated and ready-to-implement solutions. “These are very exciting times for us as we have an impressive array of products in various stages of development,” enthuses Kaddoura.

With numerous M&A deals in the pipeline, SmartStream is surging ahead by constantly enhancing its solutions portfolio. Kaddoura and his team are currently working on a plug-and-play model for the reconciliation space. Additionally, the CEO intends to expand their utility model to collateral and expense and fees management. “Implementing our solutions is like buying insurance. You can be certain that it will deliver once bought; and that’s exactly who we are and we take immense pride in it,” concludes Kaddoura.


New York City, NY

Haytham Kaddoura, CEO and Rocky Martinez, CTO

A global software and managed services provider with a focus on post-trade processing solutions for the financial markets.