Desjardins Securities enhances transaction processing

Desjardins Securities announced Thursday a five-year, $25 million deal with IBM to deliver IT services that will allow the brokerage group to move to straight-through transaction processing.

The division of Desjardins Financial Corp. will maintain its 125 member IT department and IBM will assist in development and continue to supply the ISM platform for the company, said Bertrand Lauzon, executive vice-president of finance and systems in Montreal.

Straight-through transaction processing is a standard the finance industry has been moving to for some time, where information is passed electronically along the securities transaction chain without any manual processing.

Lauzon said Desjardins will be using a new product from IBM called trade innovator for workflow to assist with upgrading that process.

“”We were with IBM before and we renegotiated our contract and we had looked at other alternatives and we finalized the deal with IBM after a six month negotiation,”” Lauzon said. “”This will help reduce our costs and increase efficiency and increase service to clients.””

Trade innovator is a Web-based line of products that will re-vamp the user interface between IBM’s base application and its customers, says Steve Whitney, director of IBM Security Industry Services in Toronto who is working with the team at Desjardins.

There are four components to the trade innovator product, Whitney said. The first is for investment analysts; the second is for the end client in a discount or full service brokerage where they can directly place orders; the third is for back office operations and the fourth is trade innovator for workflow, which can automate the business process and flow of information through the enterprise. Desjardins will be using the last tool as part of the account open process.

“”This is a new family of products for all of our customers and it was one of the key factors in their decision process as they made their commitment to us for five years. They, like a number of customers are on a continuum of various stages of implementation of straight-through processing,”” said Whitney.

Lauzon did not want to comment on the dollar value of the savings realized by reducing manual or redundant processing of transactions, saying only it would give Desjardins “”a competitive advantage.””

Whitney said the workflow component of trade innovator will be a “”significant contributor to implementing straight-through processing and getting from a three-day settlement down to a one day settlement”” when the industry goes to that.

On Wednesday, outsourcer CGI announced deals with two Desjardins Financial Corp. subsidiaries as it renewed five-year contracts worth $70 million. CGI said it would manage the mainframe operations for both Desjardins Financial Security and Desjardins Group General Insurance.

Lauzon said CGI did have an alternative to offer, but it was not as developed as the one Desjardins uses from IBM.

IBM also provides real-time front and back-office processing to Desjardins.


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