Analysis of the deal: Raymond James and AxiomSL

January 27, 2017 – By: Alex Hammond, Managing Editor – bobsguide

Earlier this month investment services firm Raymond James announced that it had entered into a partnership with risk data management and regulatory reporting tech supplier AxiomSL for the latter to provide broker dealer and banking holding company data aggregation and reporting services. We ask those on the inside of the transaction from both camps their thoughts on making the deal.

David Lesser, SVP Technology – Raymond James
What was the thinking behind the decision to search for a new data aggregation solution? Why was the decision made now?

Raymond James is in the process of replacing its legacy G/L and implementing a stack of Oracle Financial software for the G/L and ERP systems.  Part of the strategy is to implement Oracle’s OFSAA/FSDF data model. After evaluating several products, we selected AxiomSL as it had a straight forward and logical solution to source data, evaluate and report, and file.

How will the adoption of the new data management solution change how Raymond James operates on a day-to-day basis?

The AxiomSL solution will allow for straight through processing and a central repository for all our reporting needs.  No longer will there be “one-off” solutions for filing.  AxiomSL also allows us to source data separately, so we can report out of one solution and not wait for our whole FSDF model to be completed.

How long will it take to fully integrate AxiomSL’s software into Raymond James’ existing data reporting strategy?

Our integration to AxiomSL will be phased in as our FSDF model is built out.  We already have a great deal of rich Customer Data in our model as we utilise OFSAA/FSDF for some of our Customer Analytics at Raymond James.  As we source our Firm data for our G/L, the model will become more complete and our regulatory reports will be in lock step.

What is the next stage in Raymond James’ plan to overhaul its existing data management process, and how long will the complete overhaul take?

Our data management process for Financial and Regulatory management is a multi-year journey. We intend to get a majority of this completed by the end of 2018, with additional entities added in 2019.

Charles Hester, SVP Sales – AxiomSL 
What are the key USP features of the AxiomSL solutions you will be providing to Raymond James?

The key advantage for Raymond James is the fact that AxiomSL could provide reporting solutions for the firm’s broker dealer and bank holding company functions seamlessly and over one implementation. Many of AxiomSL’s US reporting clients will have complex bank holding company structures to account for and perhaps a smaller broker dealer function; by contrast Raymond James is the largest independent broker dealer in the country. So while we initially began working on bank holding company reporting with them, the bigger achievement was incorporating their dealer activities as well. The design and development of AxiomSL’s change management platform enabled us to get reporting for both sides of their business automated efficiently and without interruption.

Has the solution package you will be providing to Raymond James been custom-built to suite its particular solution requirements? How long have you been developing this solution?

The project was a multistep implementation reflecting the preferred rate of transformation and different reporting requirements that Raymond James wanted to pull in. A unique strength of the AxiomSL platform is its configurability and with Raymond James, as with many large clients, we were able to take our off-the-shelf solution and then configure it so it can be deployed quickly to work within their data streams or be adjusted for any new and evolving reporting requirements Raymond James may have. Deploying this method is both cost efficient and more flexible than using full customization. Our bank holding company solution has been developing for most of AxiomSL’s history and is an industry leader. With this expertise at hand, the broker dealer solution was developed and has rapidly matured over the last few years.

Is the deal an indication that AxiomSL is diversifying its key client base, and are you targeting increased business in this area? Are you expecting this to be the first of many similar partnerships with investment services providers?

We absolutely expect further expansion among broker dealers and a greater foothold in this segment of the sell side, particularly among independents like Raymond James. We’ve worked on this area with a Big Four accounting partner firm to validate computational models and presented in front of FINRA in order to expand into this market more, and by virtue of existing client engagements we already have many of the largest broker dealers working with us as part of larger, diversified financial services institutions.

Is regulatory compliance for financial services the key driver of business for AxiomSL?

The ability to automate the regulatory reporting and analytical process with clear data lineage, data aggregation and full control has been our key driver for growth. Further, as clients are increasingly looking to enterprise data management to guide and improve their business functions, well beyond traditional compliance, AxiomSL platform enable financial firms to adapt quickly to internal and external changes.

Are you predicting further regulatory requirements being imposed on financial services providers that will require AxiomSL solutions, and are you developing more technology to supply clients in this area?

In addressing the slew of contemporary regulatory mandates, we have a robust platform for updating and maintaining all of the applicable regulatory reports and analytics. As new requirements come out such as the Federal Reserve, SEC, US Treasury or other regulatory bodies, the responsibility is for us to keep our capabilities updated; likewise our clients will often times develop changes to how they want data presented in reports, and we are responsive to that as well as responding to differences in each jurisdiction. For instance, we’ve recently done research on our own in the broker dealer space by contacting our existing clients and potential clients regarding the CFTC’s net capital reporting requirement, similar to 15c3-1 from the SEC, and gauging the appetite for that as well as for effective reporting for swap dealers. Overall, the consensus is the biggest challenge ahead will be the ability for financial firms to respond to constant change and AxiomSL offers both: a strategic blueprint to quickly adapt to change and the flexible platform to bridge disparate systems that house key datasets while providing full transparency and data lineage.

What are AxiomSL’s main objectives for 2017?

We will be aiming to further expand trade and transactional reporting both in the US and globally, begin covering new CFTC regulations around capital computation as mentioned above, and tackle others. Some of the bigger pressures in the US arise out of newly-required legal attestations that come from C-suite, and having ability to meet that with data being utilized for these reports is a large concern for many executives at the large institutions. They now need full transparency including data lineage throughout the entire process. Towards the end of 2016, we had a solid footprint in CFO attestation and tracking reconciliations across balance sheets and report outputs, and absolutely expect this to continue. But plenty of diverse opportunities remain in the bank holding company and broker dealer spaces, especially as it relates to adapting quickly to changes while providing proper controls and governance processes.

This article was originally published by Bobsguide.

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