SAPHYRE car today – not in 6 months , not in a year to get things into place ’. We resolved to make Saphyre ’ s platform turnkey whether you are a global asset manager , a boutique bank , or a multinational custodian . When you adopt our technology , you can drive today – and you will realise the benefits . That makes the product real for an audience that tends to be skeptical of new technology .”
So , how exactly is Saphyre transforming the landscape of financial services ? It ’ s a question that the Roche brothers tackle on a regular basis . So much so , that they have a short and a long version ready to pitch .
“ What Saphyre does is instantly set up new and existing funds securely between external financial institutions , so that they can be ready to trade quickly , while eliminating post-trade issues ,” says Stephen .
“ Synchronising reference data in the pre-trade space eliminates much of the existing post-trade work , or redundancies , and provides critical groundwork for the move to T + 1 in North America by May 2024 .”
Saphyre ' s functionality for a client starts in the pre-trade space , before a trade even occurs , driven by intelligence rooted in more than 105 patents . For example , if a Fortune 500 company is setting up a new pension fund , the legal entity associated with that fund may need an investment management firm ( many of the world ’ s largest are Saphyre clients ). They also need to communicate with a custodian , who needs to then communicate with broker-dealers . It ’ s an intricate web of interfacing that is necessary for the whole machine to run .
Saphyre ’ s platform connects them all together to track that onboarding process : the Know Your Customer ( KYC ) protocols , the tax , legal , and compliance work – as well as the operational setups including things like order management systems . It ’ s a proprietary system that is unrivalled in an industry where most of this process was historically held together by a disparate patchwork of emails , spreadsheets , and faxes .
All of that helps firms to get ready to trade quickly and – with certain markets , currencies , trading instruments and asset classes – that speed is a very important , powerful benefit to these financial institutions .
A significant benefit to this up-front work being done in the pre-trade phase is that it takes around 70 to 75 % of the work out of the post-trade , too .
“ The analogy that I like to give is that you should be treating trades the same way as air travel ,” says Stephen . “ You set up your security precautions before any threat occurs , use a black box , add AI intelligence , some automation – and you can ensure your trades land in the destination while eliminating most of the issues in the post-trade .
“ Investments are currently being done in post-trade . In other words , they are in the business of putting together crashed planes and trying to get them to fly again . We ' re in the business of not having planes crash – ever . “
Certain industries are known to be laggards when it comes to embracing and adopting new technologies , and you could be forgiven for thinking that finance was not one of those . However , many processes are still in the relatively dark ages when it comes to digitalisation .
Gabino and Stephen both share anecdotes of some financial organisations being stuck in a time warp . This rocky horror show includes the use of faxes ( remember those ?), spreadsheets , and emails . This is not representative of the entire industry
June 2023 | fintechmagazine . com 79