Ten years feels like a lifetime in financial technology. When we founded Torstone in 2011, the sell-side’s main focus was investment in the front office, largely leaving back-office functions to gather dust. We saw a problem that needed to be addressed, and with it, a significant gap in the market.
Why hadn’t another business tackled this problem before? The answer was simple – the barriers to entry were huge. Tackling post-trade systems means taking on multiple asset classes across jurisdictions, navigating the sprawling complexities of diverse regulations and instruments: a huge undertaking. Our background in developing these systems in-house across asset classes for a global investment bank gave us the knowledge on how to solve these problems for others, and our unique opportunity to leverage some of the IP we had developed for the bank gave us a head start in launching our platform. Out of this, Torstone was born.
A defining decade
Since we started our journey ten years ago, it’s been quite a ride as we have seen the sands of the post-trade landscape shift into something quite different today. A decade ago, institutions overwhelmingly relied on legacy systems that served as a bare minimum in servicing their post-trade needs, with many manual processes filling the gap. However, recognition of the importance of middle and back-office functions among sell-side firms has grown steadily, shifting institutions’ mindsets and elevating post-trade technology to an essential investment, not a requisite.
There have been a multitude of complex factors that have helped to shape post-trade, and for Torstone there have been four defining themes:
A bright future
In finance, we will one day look back at the pandemic as a pivotal moment similar to the 2008 financial crisis. While a terrible human tragedy, for the technology that upholds our financial system, it was the ultimate test, not only managing the overnight shift in the way we work but a surge in volatility and transaction volumes. Powerful cloud-based technology kept many afloat, proving that technology is an essential pillar of modern finance and reinforcing the view of middle and back-office as vital functions.
Building on strong technological foundations, we can expect advancements in the cloud and automation as well as the development of new regulations and asset classes to continue to drive evolution in post-trade. Our job is to help clients future proof their systems and give them the flexibility to grow and adapt. As we recover and adapt to a post-pandemic world, we see three important trends already in motion that will usher the next era of post-trade services:
The next chapter
The post-trade space is anything but boring and we have an exciting and no doubt challenging decade ahead as we push for the next wave of innovations that will shape the banks and investment firms of the future. The global demand for modern post-trade services has taken Torstone from a small London-based startup to a global firm with well over a hundred people today across Europe, the Americas and Asia. The past decade’s rapid rate of change has shown how we, as a business, can not only adapt but thrive in a fast-paced market undergoing significant transformation. Our success is a result of the incredible hard work by our growing global team, so we celebrate our dedicated Torstone staff around the world as we set our sights on the next decade.