When it rains it pours. Recently there has been an outbreak of revolutionary zeal across North Africa, military action in Libya and Mother Nature flexing her muscles in Japan. Those that manage the business of risk have been forced to prioritise the available information, ensuring that reference data and reconciliation software are able to cope with a business environment changing on a daily basis. A successful investor relies on information. Irrespective of size, information is the key to trading efficiently and with the interconnected nature of a globalised society, a company needs to be able to access the latest news at the touch of a button.
Boutique investment banks are especially vulnerable to changes in trading conditions and the ability to track a trade confirmation can be the difference in the colour of the balance sheet.
The average boutique investment bank does not have an army of data analysts; market strategists’ software is their guide. Trade confirmation and a transaction reporting system are vital for a small bank to be able to assess the possible damage to their business.
London, the centre of the financial world, relies heavily on the information gathered by the London Stock Exchange (LSE). Forty per cent of all financial information is reference and the LSE has a dedicated software platform called UnaVista to guide small and medium-sized enterprises (SMEs) through the maze of facts and foreign input that are essential to making the right decisions.
Instability in foreign markets and in countries with direct impact on present (and projected) turnover can be a huge challenge for SMEs. An SME may be affected by the rise in fuel prices, import or export restrictions due to international sanctions or disrupted supply chains. Inflation rates have been rising throughout 2011 due to the increased costs of cotton, leather, wheat, sugar and other commodities, all of which can lead to difficult times for small businesses. Therefore, SMEs may need to resort to the same information software also. According to the Guardian, some analysts believe that the price of Brent crude could soon exceed 2008’s $147 (£90) per barrel, a major concern for many UK SMEs.
Addressing the issue of the continuing protests in the Middle East, foreign secretary William Hague said: “If these countries turn into stable democracies, open economies, imagine the benefits that will bring to the stability of the world.” He also pointed out the difficulties faced if the west chooses not to intervene further.
Foreign affairs are a mixed bag involving circumstances beyond our control. They not only have an impact on the country concerned but on the increasingly globalised trading society that has sprung up during the last 30 years. For small boutique banks in the UK, the automated systems such as UnaVista that still allow them to trade in stocks, shares or commodities are vital to ensure the balance sheet stays firmly in the black.