Interwoven acquisition to speed up trading
Interwoven acquisition to speed up trading
Aug 19, 2005: Interwoven has bought Scrittura, a provider of document automation technology and straight-through-processing for complex non-exchange based trading operations of financial services and institutions, in a bid to help these organisations process deals in hours and minutes instead of days and weeks.
Interwoven hopes that this acquisition will now allow it to offer a complete solution for the automation of Over-the-Counter Derivatives trading.
It believes that there is a need for this kind of solution because according to The Bank of International Settlements, the OTC derivatives market has grown at a compound annual growth rate of 31 percent since 2001.
In addition, the International Swaps and Dealers Association (ISDA) reports that the average number of weekly trades has risen from 1,975 in 2001 to 3,704 in 2004.
Interwoven claims that ISDA members depend on home grown technology solutions or manual processes to settle complex trades, however, these solutions often fracture under the weight of increased trade volume and the complexity and variety of products being traded.
Gavin Little-Gill, the director of TowerGroup, said that the historic growth statistics of the BIS mask the fact that the growth rate is accelerating and the growth is occurring in increasingly complicated instruments.
"To put this market into context, the OTC derivatives notional value of US$248 trillion dollars is more than 30 times the size of the US mutual fund market. While the market has grown, it has struggled to integrate the automation necessary to maintain this growth.
"Many of the proprietary and niche solutions that characterise this market are creaking under the strains that this growth has created. As a result, institutions are looking for more robust third party applications from vendors with the capability to support continued development of those applications."
Little-Gill believes that the automation of contract management is top on the list of pain points for both buyers and sellers of these securities and central to efforts to manage the growth of this business.
"The combination of a market leader in the Enterprise Content Management market and a dominant OTC derivatives platform shows promise in providing a scalable solution to this market."
The new Interwoven OTC Derivatives solution will aim to enable financial services customers to more quickly and easily conduct complex non-exchange based trades with other financial institutions by providing functionality that includes business process management; document management; records management; fax and paper capture; and messaging brokering.
As a result, the company expects to be able to reduce the time it takes for a trade to be completed from days and weeks to hours ore even minutes.
Related Article: