Risk management services provider of the year: Openlink

The state of Queensland in northeastern Australia might seem a far-flung location for a global financial technology provider, but it represents one of the latest successes for US-based Openlink in the expansion of its central bank and state agency client base.

With a population of 4.8 million, Queensland is Australia’s second-largest state (by area) and runs the largest public debt programme in the country. As the provider of debt funding for all levels of the Queensland government and its associated entities, Queensland Treasury Corporation plays a pivotal role in state funding and financial risk management. QTC’s total debt on issue currently totals roughly A$92 billion (US$73.7 billion).

In September 2016, QTC went live with Openlink’s treasury and risk management platform, Findur, replacing a number of existing IT systems that dated back to the 1990s and had required a large staff to maintain. QTC joins a number of high-profile Findur users in the region, including the Reserve Bank of Australia and the Reserve Bank of New Zealand.

“We previously ran several legacy systems that were more than 20 years old and required significant manual intervention, so we wanted to upgrade to a single system that would cover all of our business needs. Findur met our requirements, and we felt it would integrate well with our existing infrastructure,” says Rupert Haywood, managing director of risk and financial operations at QTC.

Openlink Findur is designed to eliminate bottlenecks and inefficiencies in trading and risk management so users can reduce the costs and risks often associated with capital markets activities. For QTC – which began the search for a technology provider in early 2015 – one of the attractions of Findur was that it fulfilled its requirements without adding extensive functionality that wouldn’t be needed.

Integration and configuration

Having chosen Openlink from a shortlist and signed a contract in October 2015, QTC then asked the vendor to configure the Findur system to its infrastructure, and it was handed over for user-acceptance testing in January 2016. By September, QTC was ready to retire its legacy systems and transition entirely onto Findur – a rapid implementation for a public-sector organisation. The new system supports and simplifies QTC’s front- to back-office processes, including deal entry, valuations, settlement and reporting.

Functionality and ease-of-use was key for us, because we are more like a corporate treasury than an exotic trading business, and we didn’t want a system with a lot of complex capabilities that we wouldn’t use

Rupert Haywood, QTC

“Functionality and ease-of-use was key for us, because we are more like a corporate treasury than an exotic trading business, and we didn’t want a system with a lot of complex capabilities that we wouldn’t use. In the 14 months that Findur has been live, it has been very robust and delivered what we expected,” says Haywood.

Being based in Brisbane comes with certain challenges when dealing with a global provider, however. Although Openlink has a presence in Australia, its regional resources are limited, and technical issues often have to be referred to Singapore, whose working day is several (or even many) hours out of sync with teams in Europe and the US. This means it can sometimes take a full day for queries to be resolved.

Openlink is not blind to the challenges, and at a regional conference in Queensland in August 2017, it told clients it would hire senior experts in the region to reduce the turnaround time for technical questions and issues. “We have good relationships at a senior level of Openlink – and, while the geographical differences provide challenges, we have been working together to address these issues over time,” says Haywood.

For the US-based company – which serves multiple sectors, including commodities, energy, corporate treasury and asset management – central banks and state agencies represent a small (but growing) portion of its client base. Openlink currently has 13 central bank clients, as well as nine government-sponsored entities, spanning the gamut of large, globally influential institutions to smaller regional players, such as QTC.

Customisation is key attraction

“One of the greatest advantages of Findur is that it can be customised,” says a senior IT specialist and Findur user at one large central bank. “Obviously, that can be a disadvantage, as it makes upgrading more complicated, but Openlink continues to add new products and functionality, and they are always open to discussion and feedback.”

Among the most significant developments at Openlink in 2017 was the appointment of Rich Grossi, a 20-year veteran of the company, as its new chief executive, and the launch of an enterprise cloud platform designed to support the adoption of trading and risk platforms in a cloud-based environment.

While its central bank clients are yet to access Findur via the cloud, Openlink believes the new delivery channel offers the opportunity to significantly lower costs in the long term. The company’s ability to adapt Findur to the needs of different types of institution remains one of its best selling points, and it expects to see significant additions to its central bank client base in the coming year.

“We are very excited by our growth in the central bank space, and anticipate that more institutions will take a look at our offering as they go through system replacement cycles, particularly in Europe. In anticipation of that, we are investing in standard setups and new features to enable faster implementations without the need for core code changes,” says Jerald Seti, vice-president of financial services product management at Openlink.

The firm continues to invest heavily in its product, with 25% of revenues from intellectual property and maintenance invested back into product development in 2017. Specifically, Openlink now estimates it can be up and running with a client in less than six months, thanks to recent enhancements, while key upgrades have also been made to improve the security of the system.

“Our central bank clients are very concerned about security, given the growing threat of cyber attack. We have enhanced Findur with additional layers of security and encryption features to reduce the potential for attack, and this has added significant value for some of our newer clients,” explains Seti.

The Central Banking Awards were written by Christopher Jeffery, Daniel Hinge, Dan Hardie, Rachael King, Victor Mendez-Barreira, Iris Yeung, Joel Clark and Tristan Carlyle