Post-Trade Automation: A 360 View of the Gaps and Opportunities

The speakers covered the topics of eSM, post-trade automation, and future horizons at the annual ETW (Energy Trading Week) event in London.

Enjoy the panel discussion and find a summary of the topics discussed below.

The panel discussion summary

In a dynamic energy industry constantly evolving with technological advancements, this discussion shed light on the implementation challenges, innovations, and future trajectories associated with electronic Settlement Matching (eSM). Here's a comprehensive overview of the key insights.

eSM Implementation Challenges and Triumphs

The journey of implementing eSM involves navigating through both technical and business challenges. Sometimes it takes early adopters to prove that it is up and running for the others in the industry to follow. In the case of Ørsted, it took some time to find the right model to implement the standard in their processes. Many departments usually are involved (back office, finance, etc.). Thus, stakeholder engagement emerges as a critical factor, fostering collaboration within the industry groups. A collaborative spirit should pave the way for overcoming hurdles and ensuring a seamless implementation process.

Unlocking the Power of eSM

eSM proves to be a transformative force in the energy sector, streamlining communication channels and reducing operational risk. Real-world use cases emphasize its effectiveness in improving efficiency and fortifying relationships with counterparties. 

Navigating Technical and Human Dynamics

Addressing technical challenges requires a delicate balance between technical capability and human expectations. It might require some time to show the parties involved that the new ways are more efficient than receiving a PDF with numbers to match. Decision-making strategies should emphasize practical solutions over unnecessary technical complexity, ensuring the project's progress remains steady.

Future Trajectories in Post-Trade Automation

The future of post-trade automation unfolds with a shift towards daily invoicing, promising enhanced liquidity and reduced exposure. Sometimes it takes several months, sometimes more than a year to adopt the new standard. However, automated OTC margining is a potential game-changer. So, companies should overcome the inefficiencies of the legacy systems and explore the extension of eSM to cover this dynamic frontier.

Key Takeaways and Industry Dynamics

The overarching goals of post-trade automation include reducing operational risk, optimizing efficiency, and securing cash flow. Collaboration through industry groups emerges as a driving force behind standardization efforts.

The cautious integration of new technologies, such as AI, remains at the forefront, focusing on practical benefits as well.

Looking Ahead

As the industry charts its course towards increased automation in OTC post-trading and continual evolution in processes, the energy sector's transformative journey promises exciting possibilities.

Stay tuned for more updates as we navigate the ever-evolving energy landscape, where innovation meets practicality, and industry collaboration fuels progress! 🚀🌐

About Fidectus

Fidectus’ focus is post-trading done right! It developed a Global Energy Network (GEN) that comprises three OTC post-trading hubs. Each hub has a set of tools to improve, unify, and automate settlement, confirmation, and regulatory reporting processes. Fidectus’ partner ecosystem maintains multiple native interfaces with ETRM vendors such as Endur, Allegro, Triplepont, Molecule, and others. Using the hubs results in reduced time to confirm and settle, increased trading performance, and enhanced decision-making.

For more information about Fidectus and its ecosystem partners, please get in touch with info@fidectus.com or visit www.fidectus.com.