The Hydra in Greek and Roman mythology was a multi-headed serpent that spawned two new heads when one was cut off. Modern technology stacks can quickly grow to resemble this beast. Start with a core set of applications that support vanilla securities, a few canned scenarios, and basic risk reports. Then add a sprawling set of spreadsheets, databases, and internal development with varying degrees of support, reliability, and scalability. The challenge is how to slay or tame this technical Hydra, stopping the growth and cutting heads without spawning any more.

 

From pre-trade analysis through order management, risk, and accounting, the Hydra of financial institutions is a series of screens, logins, and duplicate data entry. Over time, new asset types, financial models, and regulations increase the complexity, spawning more spreadsheets, point solutions, and data sources. This not only slows down operations, but consumes an increasing share of technology resources, reducing adaptability and competitiveness.

As we meet with potential clients, a common question is: “If I already have all of these applications and spreadsheets, why do I need Beacon?”

How Beacon Helps

Adding Beacon Front Office Suite to your technology stack may seem counterintuitive. How does adding more applications help contain the growth? The answer is that Beacon is different because it’s a platform, not an application. Beacon provides a comprehensive, enterprise-scale environment that you can use to interface with core applications, boost the capabilities of spreadsheets, easily add new functionality, and dramatically reduce your maintenance costs. Best of all, there is no “Big Bang” and you can undertake this transformation at your own pace.

Vendor & In-House Applications + Beacon

When we meet with clients, almost all of them already have many vendor products and applications that were developed in-house, so why are they still looking for more? Vendor applications can be difficult to customize or extend. In-house applications can take too long to develop and deploy. Adding Beacon Front Office Suite gives you a modular solution that you can point at a specific problem that your current system cannot handle. For example, one client wanted to expand the range of products they could trade, while another needed to run cross-asset value at risk reports on a portfolio that was siloed in different apps. Because Beacon was built as a platform first, with scalable infrastructure and APIs, you can quickly link it to your existing data sources, trading systems, and books of record, reducing the need for multiple screens and duplicate data entries. And Beacon is readily extensible so that you can easily add in your own quant libraries or define new financial instruments.

Spreadsheets + Beacon

Custom spreadsheets are a blessing and a curse in most organizations. They provide a fast and easy way to try out something new and capture new opportunities. But spreadsheets spread quickly with little governance or control, resulting in inconsistent models and data sources. They also lack scalable processing capabilities, taking longer than today’s markets demand to process large calculations. With Beacon, you can centralize models, analytics, and databases and call them directly from your spreadsheets. This combines the ease of use of spreadsheets with the scalability of cloud computing, and adds additional benefits of enterprise-class development tools and version control.

Models + Beacon

Many vendor applications offer a limited set of models and analytics, often implemented as black boxes that clients cannot read or customize. If you restrict yourself to these standard tools that everyone else is using, it is difficult to differentiate yourself in the market or identify emerging opportunities early enough. Every Beacon client gets fully transparent and licensed source code so that you can clearly see what calculations are being done. You are free to customize these or integrate your own proprietary pricing and risk models and analytics, without having to pay vendor customization fees or expose your intellectual property. You don’t even have to rewrite your algorithms or quant libraries because Beacon can integrate with existing code repositories in a wide variety of popular programming languages. Best of all, you get improved consistency because all users can share common functions and use the same versions of production pricing models and risk analytics.  

Developer Tools + Beacon

In many organizations innovation goes through several stages between idea and deployment at scale, often changing tools and languages in the process. Beacon is a platform, not just a front office system, with an integrated development environment and powerful application development frameworks. It enables quants and developers to quickly prototype new or updated functionality and test and iterate against real world data. When ready, software development life cycle and automation tools provide the necessary governance and controls for production deployment. A wide selection of standard financial models and analytics lets the team spend their time on building competitive advantage instead of reinventing common functions. The result is an accelerated path from experimentation to production that better meets the needs of today’s markets.

Infrastructure & Data Management + Beacon

Managing the Hydra of mixed systems leads to many challenges, including discrepancies between models, data errors, and a growing number of manual workarounds. Beacon includes powerful infrastructure and data management capabilities that make it easier to accommodate the real world of financial transactions. A bi-temporal data model eases reconciliations and adjustments, storing time-stamped entries for both “entry time” and “as of” time. You can time travel through the data and run reports as of any date and time and clearly see what changed and when. Job schedulers, cloud compute dashboards, and security controls take care of the plumbing, so that more of your resources can focus on business-critical tasks.

Flexible and Scalable Systems are not a Herculean Task

Hercules famously slayed the Hydra by cutting off each head one by one, cauterizing the wounds, and burying the final immortal head under a rock. But you do not have to rip and replace all of your systems to be a technology hero. You may simply need a platform that is flexible enough to leverage the best of what you already have, fill gaps in functionality natively within the platform, and gradually expand to new areas so that you can discontinue using legacy applications and spreadsheets. The cost savings and productivity gains will help your organization do more with fewer resources – and finally tame the beast.