The business of securities settlement ought to look like a club night with Pete Tong. Just as the DJ and electronic music pioneer stands before a crowd effortlessly manipulating gigabytes of music from a single iPad, the back offices of the world’s financial institutions are supposed to allow traders to switch in and out of trillions of dollars worth of assets without skipping a beat.
In reality, their performance looks more like Rick Wakeman, the keyboardist from the 1970s prog rock band Yes, who would frantically wave his wizard-robed arms as he yanked cables out of a dozen incompatible boxes.
Harmonising the ledgers of the world’s banks requires scarcely less skill and energy. Records of trades have to be compiled and entered into those systems from the phone calls, emails and post-lunch handshakes that constitute the original bargains. Reconciling those trades and ensuring that all parties have the same records is a painstaking business. Electronic trade confirmations help, especially for standardised products, but in many markets paper tickets are still the norm.