Transcend Street Solutions is establishing itself as an innovative player in the collateral and liquidity technology space. We spoke with CEO and founder Bimal Kadikar to learn more about what Transcend is doing and how it sees the evolving market.
Josh Galper: Bimal, good to speak with you. Could you explain the mission of Transcend Street Solutions?
Bimal Kadikar: Transcend Street Solutions’ mission is to create innovative technology that simplifies Wall Street’s complexity. We specialize in capital markets and in particular collateral and liquidity management solutions. Securities finance businesses are going through a major shift driven by regulatory and economic forces; they are evolving into collateral and liquidity trading businesses across asset classes. Our aim is to assist firms through this evolution and develop their competitive advantage through our state of the art technology.
Galper: What is Transcend Street Solutions approach towards the complex space of Collateral and Liquidity Management?
Kadikar: The evolution to collateral and liquidity trading requires a number of changes in firm operating models and infrastructure. We have carefully designed our approach to help firms through this evolution as seamlessly as possible by developing their collateral and liquidity management capability without mandating major changes or complex retirement projects. Our technology solution, CoSMOS, operates as the glue in the existing ecosystem and will allow firms to evolve quickly while leveraging their current investments.
We have designed CoSMOS as a front office trading platform with a specific focus on front-to-back connectivity. Besides innovative technology, we have focused on building value-added functionality that helps firms connect their disparate data across multiple businesses and systems.
We are a team of passionate and experienced technologists who are driven to deliver a solution to an industry segment that is in the most need. We work closely with our partners to establish scalable architecture and execute with agile pace for delivering business value aligned to their needs and priorities.
Galper: Where are you and your team coming from?
Kadikar: We are technologists with the battle scars of Wall Street. I come from Citi, where I led large technology organizations such as Fixed Income, Electronic Trading, Prime Finance, Futures and OTC Clearing. In my last four years at Citigroup, I ran the Collateral, Liquidity, and Margin initiative, and my experience there was the spark that led me to start Transcend Street Solutions. Our team has a unique blend of technology skills and experience, as well as a pedigree of solving complex challenges and building global platforms in repo trading, cash and derivative processing, and low latency electronic trading. This diverse background has helped us build one of the best collateral and liquidity trading systems in the market.
Galper: There are many collateral management systems in the market. What makes CoSMOS stand out?
Kadikar: There are many solutions in the evolving space of collateral that have a siloed approach, but they do not do justice to the needed solution. As mentioned earlier, our ability to operate within the existing ecosystem enables us to quickly add business value based on priorities and pain points. We focus on connecting disparate collateral data sources across the businesses and functions to build a solid foundation for the business. Our thoughtful business data models and integration technology make this a very efficient process for our clients. We apply our decision support services and user friendly dashboards to power this data into actions that can be driven by users for specific business needs.
In terms of functionality, we provide seamless access to information that is usually fragmented across many different systems or not available in the firm. CoSMOS provides comprehensive functionality to intelligently mine collateral agreements, robust real-time view of inventory across the enterprise, visibility of margin calls across margin centers and ability to optimize various demands through customizable optimization algorithms. Liquidity analytics functionality allows firms to implement sophisticated sources and uses models that can incorporate LCR rules for optimal capital impact. This state of the art functionality and our architectural approach allows firms to leave their existing platforms unchanged but still elevate their collateral and liquidity trading capabilities, preparing them for the new era.
Our noninvasive approach to this business problem, our state of the art technology with emphasis on real-time trading, and comprehensive business functionality with powerful dashboards make us entirely unique from the other players in this space.
Galper: You’ve mentioned data, decision support and user dashboards. Could you tell me more about how it all comes together?
Kadikar: We see a three-step process in building next generation collateral and liquidity data management to support a variety of different business requirements across business areas. First there is harmonization and integrity of the data – that is the middleware. This includes all collateral agreements (ISDA CSAs, MSLAs, financing transactional data, CCP schedules, etc.), trades, positions, settlement ladders, margin and exposure data, reference data for securities, accounts, legal entities, market data, etc. Bringing together the data is a foundational component and is quite challenging, but we have a lot of experience in getting this done and have developed targeted technology to make this easier for our clients.
The second part is analytics and decision support services that operate on this data. This is how you evolve from “Data -> Information”. When you get to decision support, that is where a collateral substitution or optimization process can result in quantifiable cost savings or new opportunities.
The third and most visible part is the rich user dashboards. Our dashboards bring information to users in a business friendly and actionable way. In addition, allowing users to control how decision support services should operate really drives the evolution of “Data -> Information -> Action”. Our main goal is to provide a powerful technology platform and give users control via our dashboards.
This modular paradigm allows our clients to address their known challenges right away, but it also provides peace of mind that they can extend this platform for tomorrow’s unpredictable challenges with ease.
Galper: Data integration is a major industry challenge. How does Transcend Street help?
Kadikar: We have focused on developing integration tools that easily allow for real-time transformation of data. We provide a straight-forward interface that allows users to map data between two systems. We enrich and validate data flow in real-time based on rules and configurations.
Our data quality dashboards provide the user with typical data problems on the platforms such as trade exceptions, mismatched accounts, reconciliation differences, etc. Our design philosophy is that “sunlight is the best disinfectant”. Providing easy visibility on data quality issues allows appropriate users to fix those issues and, over time, the platform becomes significantly more powerful.
On top of our superior technology, a key differentiator is our experience of solving these challenges in multiple firms of varying complexities. Together with our experience and our technology, we make this journey a lot more efficient and cost effective than most alternatives.
Galper: How does Transcend Street work with market infrastructure providers like Broadridge, BNY Mellon or DTCC?
Kadikar: We connect to many of the major infrastructure providers and vendors on behalf of our clients. We connect to settlements and clearance industry players through SWIFT messaging in real-time, and to triparty agents for agreements, allocation, and other relevant information.
Besides industry utilities, CoSMOS connects to firms’ front and back-office systems for specific transactional data. For example, we connect to back-office providers such as Broadridge for the full stock record and transactions in real-time as well as front office systems of repos and sec lending activity. We connect to margin centers to collate margin calls and collateral balances across legal entities. We have developed standard adapters for many of the common vendors in this space to make integration as easy as possible.
In general, we operate from firms’ internal infrastructure and connect to internal systems, vendors and industry utilities as needed. We have worked hard to make this integration simple using our innovative modules, common adapters and integration technologies.
Galper: How do you see this evolution to collateral and liquidity trading playing out in the next few years?
Kadikar: These are exciting times as economic environment, regulatory pressures and technological advances are creating entirely new opportunities for the industry. This is a big change and, like any large scale change, it needs to be navigated carefully. There will inevitably be winners and losers, but we strongly believe that an enterprise-wide collateral and liquidity management function to drive optimization of cost and capital is a key differentiator in the industry. We will see a lot more integration and automation in the coming years across securities finance, treasury, OTC derivatives, and operations areas and their silo-based systems will come under a lot of stress. Firms that embrace this change smartly and focus on developing a strategic operating environment with a sharp focus on execution will be clear winners.
Bimal Kadikar is a founder and CEO of Transcend Street Solutions, an innovative technology company focused on building next generation collateral and liquidity management solutions. Prior to founding Transcend Street Solutions, Bimal served in several senior roles at Citi Capital Markets Technology Division, where he managed global teams and projects with budgets of $500+ million in supporting multi-billion dollar businesses.
Bimal led the technology organization for Citi’s prominent Fixed Income Currencies and Commodities businesses globally. He was also tapped to build Prime Finance, Futures & OTC Clearing business technology platform as part of Citi’s push to expand these business areas. Many of these technology platforms have won industry accolades and client recognition, helping Citi grow in these businesses significantly over the years.
Bimal also led a high profile initiative of driving Collateral, Liquidity and Margin strategy globally at Citi, partnering with multiple business and cross- functional areas such as Global Treasury, Repos, Securities Lending, Prime Finance, Futures & Clearing, Margin Operations, Securities Services and Technology.