SST Awards 2018: Best Sell-Side OTC Trading Initiative—FIS Front Arena

The key to Front Arena, which originally grew up under the SunGard brand until the company was acquired by FIS in November 2015, is its ability to work across electronic trading and OTC on the same digital platform. While most software suites claim to be cross-asset in nature, Front Arena takes that strategy a step further by also combining views for incoming quotes and orders from proprietary desks. “We can market-make fixed-income bonds, equities, structured products, options, interest-rate swaps, commodity swaps or any other products,” says Rob Mackay, head of cross-asset solutions at FIS. “We can also handle the workflow for order management of these products—either the internal workflow or the external workflow toward the execution venues. This makes it possible for Front Arena to replace incumbent single asset class systems in these areas.”

The driving philosophy behind Front Arena’s development, Mackay says, is to combine risk management, trading and all other aspects of the trade lifecycle into a single platform, with an eye on the continuing electronification of OTC markets. This year, of course, the focus for Front Arena’s European client base has been around the implementation of the revised Markets in Financial Instruments Directive, or Mifid II, a piece of legislation that Mackay says has been a “game changer.”

Looking ahead, Front Arena, which issues four releases per year, will be incorporating functionality for a range of regulatory changes. These include the implementation of the Standardized Approach to Counterparty Credit Risk and the Fundamental Review of the Trading Book, but the firm is also eyeing technology developments as well, and plans to incorporate “advanced business intelligence, big data management and aggregation,” Mackay says, which will become increasingly important over the next 12 months. “The key challenges for our customers are preempting ending up behind their competitors and staying agile with regard to disruptive technologies and the ever-increasing digitalization trends,” he continues. “They need to foster partnerships and to be inclusive in an open architecture rather than fending off new innovative entrants. Specifically, in capital markets, our clients need to consolidate more of their IT solutions to reduce costs further and increase consistency across the enterprise. The modern capital markets institution needs to know all the variables affecting overall profitability and risk assessment.”