OTC market “no longer exists as we knew it”

September 23, 2016

 

One thing we’ve learned is that no two back offices or IT departments are the same in the energy industry.

 

For this very reason, it’s those who are in the business of helping multiple organisations which have a unique, cross-company, insight into where the market is at at any given moment.

 

To commemorate his place on stage at #ETOT, we caught up with BJSS’ Head of Commodities & Utilities Practice, Amir Soufizadeh, to get his take on current times.

 

The energy trading sector has been undergoing deep changes in the past few years, with the rise of renewable energy offers, and the heavy regulatory requirements. In your opinion, what has been the main impact of these changes on the markets? On heads of BO and heads of IT’s day to day work?

 

The main change to note is that the OTC market, as we knew it, no longer exists, mainly due to the introduction of regulatory regimes such as EMIR, REMIT, MiFID arising from the commitments made at G20 summit in 2009.

“…with the decade low commodities prices, it’s unrealistic to expect margins of pre-2014 levels… [which has] placed increased pressure on IT and BO teams to constantly review their approach and identify transformational programmes to reduce their cost base.”

It took some time for the industry to put in place effective IT and BO operating models to address these reporting requirements. The benefits of these regulatory requirements are yet to be fully realised but considerable effort is going into ensuring compliance.

 

This investment has resulted in an increased cost to trade, while on the other hand with the decade low commodities prices, it’s also unrealistic to expect similar margins to pre-2014 levels. This scenario has placed increased pressure on IT and BO teams to constantly review their approach and identify transformational programmes to reduce their cost base.

 

Through your clients we imagine that BJSS will have a somewhat cross-company view of what technology trends are currently in place. Could you tell us of any? Are there any particular areas where people come back to you for guidance?

 

We’re frequently asked to help clients keep abreast of the latest technologies and understand their benefits and pitfalls. In recent years a series of disruptive technologies (e.g. Big Data and Cloud) have created new market values and facilitated better handling of data.

 

We offer a range of IT services to our clients from business and IT consulting and Architecture services to application development and digital transformation advisory. Of particular interest recently has been the ‘Journey to Cloud’ and the roadmap enabling a smooth transition to maximise the benefit of Cloud adoption. 

 

BJSS is working in partnership with major Cloud providers and this has straighten our digital team’s product knowledge to design effective Cloud strategies for our clients.

 

“it’s often unclear to our clients how to put in place effective governance structures to ensure accuracy of the data. There are also challenges around maintaining mapping between systems and, more importantly, with external parties such as regulators or exchanges.”                                                 

Can you tell us a bit more about the innovation panel you will sit on during the IT stream at ETOT? What will you be bringing to the table?

 

The panel will discuss the key technology issues facing organisations, particularly Big Data, Cloud and other disruptive technologies.

 

I’m keen to touch upon the challenges of Big Data information management - it’s often unclear to our clients how to put in place effective governance structures to ensure accuracy of the data. There are also challenges around maintaining mapping between systems and, more importantly, with external parties such as regulators or exchanges.

 

Another area is developing a strategy around ‘Journey to Cloud’ and how firms can realise the benefits a Cloud-based approach offers, particularly when leveraging the latest cloud-native functionality.

 

What do you think?

 

Have weak market conditions really put so much of the onus on BO and IT teams to do more?

 

Is moving to cloud based technologies now an inevitability as a result?

 

Let us know on!

Twitter Commodities_ppl

LinkedinCommodities People

Please reload

Recent Posts
Please reload

Archive
Please reload

Follow Us
  • LinkedIn Social Icon
  • Twitter Basic Square
  • YouTube Social  Icon

Follow Us

  • Twitter - Black Circle

Commodities People
Level 39
One Canada Square
Canary Wharf
London E14 5AB

+44 20 7111 1615

© Commodities People 2019