Integrating electronic trading platforms
As a passive provider focused on index funds, KLP integrates with a host of different electronic trading platforms. With the days of needing to call brokers long gone, better integration and automation to these platforms was a necessity.
To reduce manual processes, ensure a complete track record of orders and transactions, as well as capturing all trade parameters as required in MiFID II, KLP integrated Bloomberg EMSX, Bloomberg TSOX and VCON, TradeWeb, MarketAxess and FXAll as platforms for order routing and execution.
For the equity passive team, SimCorp Dimension is now their main tool, meaning that the portfolio management process has been moved out of Excel and into SimCorp Dimension - a key success criteria for KLP when they set out to upgrade their front office.
Ensuring a robust technical foundation
While KLP’s internally built front office solution worked, it was technologically fragile. Rather than waiting until something went wrong to take action, KLP proactively realized the need to make a significant upgrade.
KLP needed to reduce their reliance on spreadsheets and implement some more robust processes throughout their front office. The Oracle database and Excel frontend had run its course, and it was now time to find a solution that could support their current and future growth ambitions.
Harald Harlem, Head of Investment Management Services at KLP sums things up nicely, saying that, “in the past we used SimCorp Dimension for tasks within the middle and back office, including post-trade processing, whereas where we recorded the orders in the execution platform was completely independent. This meant that we had multiple spreadsheets tying them all together as the main tool for the portfolio management process. All of that has been moved into SimCorp’s Front Office Suite.”
By making the entire system architecture more robust and boosting the strength of system integration, KLP's IT platform is now gradually becoming more robust and reliable. “Since going live, we still have some technical operational issues, but we are moving in the right direction and we are confident that we will have a much more stable solution going forward,” says Tore Hjorth.
Better and broader data
By integrating SimCorp Dimension across their front, middle and back offices, KLP now has a fully integrated solution. From a data perspective, it means that they can now see everything in one view. Having an investment book of record (IBOR) underpinning the entire system offers huge advantages in terms of having all data in one place, including no longer having to reconcile the data between disparate systems.
Since integrating their platforms, Harald Harlem says that, “data quality has significantly improved and helped streamline a lot of processes.” KLP is now able to “run all main processes, except risk estimation, in SimCorp Dimension.” This is very much related to being able to support asset complexity in a simple way. “We’ve improved our data from quite good, to really good. And in a hugely competitive market, that can make a big difference,” says Harald Harlem.