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Understanding Digital Transformation:
A Mini Case Study

Mosaique | March 18th, 2020

Part One: Leading with Technology

“Digital transformation” is a hot topic but very few people actually take the time to stop and consider what the phrase means or, more pointedly, provide examples of how digital transformation is working in actual practice. Digital transformation is the flavor of the age as companies like Netflix, Uber and Amazon upend traditional entities or create entirely new lines of business. The message is seemingly very clear: everyone should be doing whatever they can to get digitally transformed!

In reality, the successful activation of digital transformation is a complex interaction between deep functional knowledge, new technology and existing best practices to create outstanding outcomes and it is neither simple nor easy to achieve. In this two-part blog series, we take a look at both the technologies and practices that can be combined to produce far-reaching digital transformation through the lens of the business challenge that Mosaique is addressing. Part one addresses the “digital” side of the equation by focusing on technology while part two takes a look at the practices and processes that drive “transformation”.

Making the business case

Digital transformation is not an intellectual exercise; it deals with real-world issues and opportunities. In order to illustrate the components of digital transformation, we will use the challenge that we at Mosaique are tackling.

As highlighted in our earlier blog post, Delivering Cost Efficiencies in Derivatives Markets, as much as half-a-billion dollars in fees are outstanding at any one time and existing systems and practices make it impossible to gain any improvements. A lack of standardization or accessibility to legal agreements, manual batch processing, monolithic platforms and siloed data combine to create a seemingly impenetrable logjam. As a result, it is very difficult to understand metrics such as cost per trade and both payable and receivable payments are often delayed by 30+ days as a result of hard-to-explain breaks.

The challenge is to reimagine and improve on existing processes in systems in a way that addresses these inefficiencies, freeing up working capital and boosting both productivity and profitability by opening new avenues for risk management, cost containment, business analysis and more. The first step to doing so is by employing the right technology for the job.

Three key technologies

The heart of a digital transformation initiative is found in the technology tech stack employed. At Mosaique, we are deploying a tech stack that consists of cloud, open source and distributed ledger technology (DLT) in order to deliver transformation in back office processes beginning in the listed derivatives industry. This capability can be utilized to achieve the same results in any number of other asset classes and industries.

  • The use of open source technology increases our time to market for building new features while providing community-driven code security safeguards. It also allows us to deliver no-cost toolkits for integration to existing systems.
  • cloud technology provides flexibility both in terms of innovation in development and operating scalability. We have partnered with AWS to help us build an extremely secure and robust architecture capable of handling millions of events per day.
  • distributed ledger technology (DLT) is perfectly suited to a multi party ecosystem where there are many participants that are both competitors and partners, legal documents are complex and varied, and data is not standardized.
  • Built on these three technology pillars, Mosaique provides the most accurate accounts payable and receivable ledger for fees and commissions in the derivatives industry.

    When digital transformation is done right it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.
    ~ George Westerman

    Putting it all together

    Technology is a crucial ingredient in achieving impactful digital transformation. When the right technology is combined with deep industry expertise to address a business challenge that previously seemed insurmountable, true digital transformation can begin to take place. In the case of accounts payable and receivable for fees in the derivatives industry, this means combining our 25+ years of multi-asset post-trade experience with the application of open source, cloud, and DLT.

    However, this isn’t the end of the story. Simply applying new technology to a business challenge isn’t enough in and of itself; work must be done to address the factors of technology partners, development practices and aligning with clients in order to achieve true digital transformation. In part two of this blog post we take a look at these factors to show how we are building something more than a “faster butterfly”.

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