Taking the Bore out of IBOR

Startup Stock PhotoExecutive Summary

For those firms trading in the Global Markets, the past few years have been a time of fantastic innovation and investment growth amidst the implementation of ever more demanding regulatory responsibilities for fear of largely as-yet-unknown penalties. Two ideals have remained true; (1) we trade with the intent of positive financial returns, and (2) we perform operational processes supporting these investments with the intent of mitigating risk wherever possible. While trading decisions can be largely relative to market conditions in the short term, risk neutralization in the trade support lifecycle for the long-term is requires careful consideration of design and breadth of scope. The value and success of this risk mitigation is directly enabled by the context of the information (e.g. the data) along with the security, validity, and availability of the information (e.g. infrastructure technology). Knowledge is information in context and perhaps the best and most important example of this intersection of technology, operations, investment support, and data governance is the Investment Book Of Record (IBOR).

The IBOR-related papers that you’ve read before have probably focused on the general drivers and the architecture options for establishing an IBOR. However, finance is not general and consistent, ever-more-rapid technology innovations are rendering traditional architecture options as suboptimal (we won’t go so far as to say obsolete) and challenging operational processes that have largely remained untouched for decades. Here we put the IBOR in context, outline the attributes/features that make it valuable, outline how existing operational functions are enabled by the IBOR given its central role and how various investment process functions are empowered by it, and also go beyond the traditional buy-side focus to address the heart of the subject: why a central position management solution is equally relevant to Funds, Fund Administrators, Investment Banks, and Custodians. The situational uniqueness presented herein is the simultaneous importance of both internal and external information communication needs. Finally, we also talk about the way forward for a firm that may be looking to put a solution like this in place and outline criteria for measuring success , along with an eye towards what the future may hold. Our intent is to tie in these approaches for the enablement of cross-practice excellence at any given financial firm engaged in trading or a related need of operational, accounting, and regulatory support.


Startup Tips from London’s Fintech Week

london, fintech, david k donovanAs the established hub for Europe in financial technology, London kicked off FinTech Week with a bang. The world-renowned event brings financial, IT, and startup companies together for a week of conferences, networking, lectures, and workshops.

One startup in attendance was Simply Wall Street, co-founded by Al Bentley. The Australian-based company built the entire foundation of the organization on top of the idea of providing investment information in a simple, infographic manner after Bentley’s own struggles with understanding the process. He commented, “I wanted to invest in shares, so I started to teach myself about investing…I quickly learned that it was actually very difficult. It took me about six months of research before I felt confident enough to make an investment.”

According to the cofounder, investment advice seemed to be geared strictly towards those who had knowledge of it. This left room for Bentley to create a new business. Startups have been growing at a rapid pace in all Fintech hubs including New York, San Francisco, Hong Kong, and Berlin. If you’re creating your own startup, below are three principles that you can utilize in the financial technology world:

Think Globally

Instead of focusing solely on your own markets, you need to think of the markets across the board. The economy of the U.S. has become (and has been) a global market and will not be changing any time soon so this should be taken into your financial strategy. Target global markets that can best benefit your company.


Keep things simple and clear. Whatever the product is that you’re selling, it’s important for investors to know exactly what it is. If it’s easy to define or to assess what services are free, what services are paid for, and what services are a premium, it will be easier to expand your startup through investors. People want to know exactly what they are paying for and what they are not.

Proximity is Golden

Networking is essential to any business, and people seem to like it when it’s convenient. Position yourself and your company to help you achieve the best results. This may mean relocating. For example, Simply Wall St has extremely close ties to the U.S. and the U.K. At this point, Bentley is considering moving headquarter to London to be closer to their interests there. “…with a presence in London, we will have greater opportunities for partnerships.”

Whether you are looking to launch a start up, or revamp a current venture, FinTech Week provided an opportunity to learn, grow and network. To learn more about the major trends at FinTech Week, see my presentation below:



Information courtesy of forbes.


Nairobi – the Newest Tech Hub

david k donovan nailabAs of late, Nairobi Kenya has earned a nickname as “Silicon Savannah”.  The capital city of Kenya is rapidly establishing itself as a tech hub in the developing world. Upon initial inspection, it may not seem like Nairobi lends itself to being a startup epicenter. However, due to the city’s adaptable bankings system, wealth of recent STEM graduates from Nairobi colleges, it’s not really a surprise that this city is becoming an ever expanding metropolis for e-commerce.

This is not to say that the city doesn’t face any problems with the explosion of the tech sector. The city has its fair share of problems regarding security, governmental bureaucracy and lengthy waiting periods for corporate registration are all legitimate deterrents for young startups. However, in spite of these obstacles,  Nairobi persists as a hotbed of tech-based entrepreneurial activity.

Furthermore, with the rising popularity and accessibility of mobile phones and devices, the market for these tech based companies is expanding. Currently, Nairobi houses 242 startups and almost 2,000 investors. But what is it that incited this growth in tech companies? and what is fueling such rapid growth?

In addition to internationally-known companies like IBM designating Nairobi as a new headquarter, the Kenyan government has stepped in to provide incentives and assistance for those companies looking to base their startups there. For example, only two years ago in 2013, the government paired with and incubator Nailab and started a 1.6 million dollar tech venture that would allow entrepreneurs access to monetary resources, information and connections to people within the industry in a position to help them develop.

The program supported by this partnership lasts for three to six months, and the subsequent graduates have resulted in a number of important and visible tech companies, who may not have otherwise come onto the scene so strong without the initial aid and mentorship so evident in this kind of program. In addition to an actively supportive atmosphere for these new ventures is a very clear opportunity within the mobile sector.

Between 2010 and 2014, internet penetration expanded from 14 percent to 43% of the Kenyan population having access to the internet. In addition to this significant increase in internet access, currently 82% of Kenyans own a cell phone, which is a HUGE market.

In addition to the explosion within the digital and mobile markets in Nairobi and the rest of Kenya, Nairobi is a quickly expanding city in Kenya, and is seen as  a fast growing city to watch throughout Africa! Not just in Kenya.


New Technology Breeds New Collaboration

David K DonovanThere have always been the naysayers. Since the first societal shifts towards digital emerged into our collective consciousness, many have voiced their concerns over purported disconnection, joblessness and depletion of skills that accompany this automated new world. While some cling to the notion that we lose something by following this move towards all things digital, others embrace this movement towards automation and new technology as a natural progression. Regardless of one’s opinion on the value added (or removed) by digital processes, all industries are incorporating automation due to the explosion of growth within the tech sector. Although it may seem like we are undergoing a period of human extraction, one can’t ignore the ways in which these technologies actually bring us closer together and allow a greater reach for who and how we communicate with each other. How we communicate and in turn collaborate with each other has changed significantly over the past 50 years, owing to great advances in technology. While the value of these changes may remain hotly debated among some, the fact remains that technologies exist now that allow people to communicate and collaborate – at scale, regardless of location. When considering all of these new ways of communicating in the context of a company, however, one quickly notices the need for intention behind how companies function as collaborators both internally and externally. From a technical standpoint, companies need to evaluate how to support the needs of the employees. To facilitate collaboration among employees, management needs to figure out what kind of infrastructure best supports this. Spending time and money investing in the proper network capabilities and appropriate software and hardware is critical. Additionally the size of the company and the growth rate are also important factors when considering both internal and external communication. Today’s workforce includes non-traditional workers such as temps, free-lancers, people who work from home, and millenials – who are accustomed to communicating digitally. This means that the “work space” can really mean anything, from a coffee shop to a home office to a traditional work space. However, even the look of the traditional “work-space” is evolving. Especially when looking at startups and newer companies, open work spaces free of cubicles or closed off offices are becoming the norm. Knowing that the look of the traditional workspace is in flux, it’s up to company heads to consider how to best support collaboration through truly planning out the physical and digital landscapes of the “work space”. Collaboration will always be an important part of the work environment, and we are living in an exciting time of transition that allows companies the chance to experiment with supporting collaboration through well-considered digital and physical work-spaces.