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  • Figaro can transform and standardise middle office processes including billing, compliance and data management

    Changing market dynamics—i.e., complex trading strategies, the need for heightened transparency and more sophisticated risk management techniques are encouraging financial institutions to transform their middle offices from a support function to a strategic asset.

    But what is the middle office?

    Although the boundaries change constantly, Figaro’s middle office functionality encompasses operations, corporate treasury, risk management and strategic management. Pre and post-trade compliance, risk and credit management and trade capture and settlement are also widely thought of as middle-office territory and as such, are firmly within Figaro’s remit.

    Portfolio Performance & Risk Analysis tools are available for both client and model portfolios, for accurate performance tracking.

    • Performance can be analysed within specific dates
    • Analysis can be performed within an Asset Hierarchy for Capital Appreciation, Income and Total Return measures
    • Performance can be benchmarked against standard or user-designed indices and/or a relevant model
    • Valuations are available immediately
    • Full contribution and attribution analysis, using the Brinson-Fachler model, is provided.

    For risk analysis Figaro employs (among other volatility measures) the Capital Asset Pricing Model which enables users to determine:

    • Volatility
    • Annualised Volatility
    • Average Excess Return
    • Tracking Error
    • Annualised Tracking Error  

     

    Tailored performance measurement functionality

    To measure client and model performance accurately requires robust technology that can be tailored to meet specific business requirements. Through JHC’s performance module, client and model portfolio performance—which can be analysed within user-specified dates—can be benchmarked against standard (or customised) indices or the appropriate model.

    On screen valuations, using real time data, are available instantly.

    The module also facilitates full contribution and attribution analysis, using the Brinson-Fachler model: analysis can be performed within an Asset Hierarchy for capital appreciation, income and total return measures.

    For risk analysis, JHC employs (among other volatility measures) the Capital Asset Pricing Model which enables users to determine:

    • Volatility
    • Annualised Volatility
    • Average Excess Return
    • Tracking Error
    • Annualised Tracking Error  

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    Automation – coupled with configurable exception-based workflow - increases efficiency and reduces operational risk. 

    JHC’s experience of helping financial institutions migrate from other systems has proved that blending a high degree of automation with straight through processing (STP) enables clients to make their businesses more efficient, reduce their operational risks and improve transparency. 

    By replacing repetitive tasks (usually performed by people) with standard templates, potentially variable processes become consistent, information gaps are non-existent and procedures dovetail seamlessly.


    The JHC Figaro platform incorporates a range of automated and exception-based workflows which optimise many day-to-day and highly repetitive operational tasks including:

    • Client on-boarding
    • Portfolio monitoring
    • Trading
    • Reconciliation
    • Settlement
    • Reporting and regulatory compliance tasks 

    With automated links to more than one hundred third parties, custodians and trading venues JHC Figaro moves clients towards a true exceptions-based workflow, safe in the knowledge that the data they rely on is complete, accurate and having flowed through the system seconds ago, up to date.  

    Figaro also incorporates a task management system which a) enables a process to be broken down into tasks and b) ensures that each task is completed correctly and on time. The tasks are controlled by allocation to specified users, the sequence in which they must be completed, the timescale for completion, dependencies that may exist before a task can commence and conditions under which tasks may start, complete or be escalated.

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    Automated portfolio monitoring

    To make decisions about the portfolios they manage, advisers need information: irrefutable and up to date facts. Not in a couple of weeks, days or hours, but the very moment the facts are required. Having every piece of information to hand, rather than just some of it, enables managers and advisers to make timely and confident decisions. But portfolio management data, assuming it exists, can take time to unearth. Even when found, it may have to be interpreted, pieced together and ‘tidied up’ to be of any real use.

    On-demand portfolio analytics, oversights and insights with no stone left unturned

    JHC’s tools can scrutinise every holding, on and off book, in every asset class, alternatives included, in every portfolio across the firm, taking full account of mandates, weightings, benchmarks and idiosyncrasies. The scanning process—which is entirely automatic—is performed every day (ex ante) across the firm’s entire book. Findings are summarised and displayed in one, all-encompassing view so managers can see, at a glance:

    • An instant, complete and transparent picture of the client’s relationship with the firm
    • Where any and every portfolio stands in relation to its risk and suitability mandates
    • How the component parts of the portfolio and the elements within each component, relate to each other
    • The real-time information they need to inform, substantiate and justify decisions
    • Patterns, trends and correlations that would otherwise be missed

    Enhancing service, adding value

    Knowing exactly where each portfolio stands at any point in time, managers are always fully informed, demonstrating that their firm is committed to looking after their clients’ best interests. Being able to provide a consistently proactive and valued service over the long term, secures client commitment and provides opportunities to increase assets under management.

    A graphic-rich and illuminating interface

    JHC’s technologies transform opaque data into charts, diagrams and graphics which advisors and clients can more readily relate to and digest than any spreadsheet format. Rich and engaging visuals are created on the fly for screening on any device.

    • For compliance: the firm can prove that it takes a proactive, consistent and fully documented approach to the management of clients’ investments.
    • For risk: firm-wide risks posed by managers’ investment strategies on both a collective and individual basis can be monitored. Identifies key themes, trends and trouble spots including recurring compliance issues and how quickly and fully (or not) those issues were addressed.
    • For investment manager: highlights areas of risk across the book and the client base; provides a 360-degree on demand view of a client’s portfolio and the client. When changes need making, managers can choose which clients to contact and when.
    • For senior management: Analyse expected returns of investment managers individually and in relation to others and assess enterprise-wide risks.
    • For clients: rather than trying to grasp theoretical definitions and quantifying the potential consequences of risk, as determined an initial risk profiling exercise for example, investment risk is simplified and conveyed in a form that clients can understand and relate to.

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    Regulatory compliant tools and platforms that enable financial institutions to meet their global reporting requirements, including MIFID II and GDPR.

    With firm foundations in the UK, JHC’s provides ongoing regulatory support (as standard) for the UK, Ireland and Channel Islands and Republic of Ireland jurisdictions and many other European jurisdictions. However, the flexible and scalable nature of JHC’s architecture means that regulatory requirements across the globe can easily be incorporated in our tools and platforms. 

    Irrespective of location, JHC’s product and regulatory experts work closely with the client to ensure the firm remains compliant across all offices and departments.

    Some key compliance-related and automated processes include: automatic segregation of clients' and firm’s monies, client ledger sweep (for settled transactions) and capital and income sweeps.

    By providing accurate, comprehensive and up-to-date reports, compliance departments are able to manage their financial risk requirement and aged debts more efficiently.

    Collaborating on compliance
    A joint JHC/Client Regulatory Steering group meets frequently to discuss new and pending compliance and regulatory changes. The necessary changes are then incorporated in our tools and platforms.

    Issues completed:

    • FATCA & CRS
    • CASS
    • T+2
    • AIFMD
    • UCITS V
    • PRIPPS
    • Flexible ISA
    • Transaction Reporting
    • Trail Commission (post RDR)

    Issues in progress: MiFID 2 (e.g.):

    • Transaction Reporting
    • Reporting of Fees & Charges 

    Lifetime ISA

    Client consensus and engagement with PIMFA ensures the correct interpretation of the rules thereby reducing regulatory risk. 

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    Automated, customisable workflows to suit individual users

    As competition increases, customisable and highly automated workflows become indispensable. 

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    Our automated workflows generate and track compliance warnings and breaches for all portfolios at investment manager, group/branch and at organisation level. Once the breach resolution process commences, its progress is tracked and documented automatically at every stage. Future portfolio review dates are diarised and systematic escalation paths and notifications ensure that reviews are never missed.