Are you looking to streamline your derivatives operations but unsure how to pick the right business process outsourcing (BPO) provider? You’re not alone. In this blog, we’ll explore the top three steps for picking a BPO provider that aligns with your derivatives needs. From the importance of their specialization to technology and partnerships, we’ll cover key insights you need to make an informed decision.
Let’s avoid talking about volumes, change management resources, and the dreaded rate card. Instead, let’s explore the essentials of selecting a derivatives provider.
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Step 1: Focus on Providers Who Specialize in Derivatives
When it comes to derivatives operations, the last thing you need is a jack-of-all-trades provider. You want a team that lives and breathes derivatives. Specialized providers bring you more than just standard services; they offer tailored solutions, deep domain knowledge, and the expertise needed to navigate the complexities of trading, middle-office, and back-office operations. The real impact happens when your provider can quickly adapt to new instruments, allowing your front office to seize market opportunities without delays.
A great match is when their expertise directly supports your operational goals.
Actionable Tip: Look for providers who have experience working with firms like yours. Check out their standard service offerings, and don’t be swayed by shiny marketing until you’ve seen real case studies and client testimonials. You want a provider who’s been there, done that, and won’t require you to customize everything from scratch.
“No-one wants a shiny new service and having to customize 90% to make it work!”
Step 2: Embrace Technology
Here’s why that matters – technology is at the heart of modern derivatives operations. From automating trade workflows to ensuring IBOR and P/L data accuracy, the right tech can make all the difference. Seek BPO providers that work with market-leading derivatives system vendors providing out-of-the-box access to the best FinTech applications such as margin analytics, regulatory reporting, model libraries, data integration and digital assets for secure transactions, and integrated platforms with ecosystems for seamless operations.
Actionable Tip: When you’re evaluating providers, don’t just ask about the tech they use—ask to see it in action. Request demos, proof-of-concepts (POC), and ask about their investment in future tech. Request the yearly R&D product roadmap committed spend. This will help you gauge their commitment to meeting your evolving needs
Step 3: Look for a Provider Who’s All About Partnership
A successful outsourcing relationship isn’t just about hitting KPIs—it’s about forming a true partnership. You need a provider who feels like an extension of your team, not just an external service. Prioritize providers who focus on strong communication, are flexible in meeting your needs, and are committed to ongoing improvement.
Actionable Tip: When you start negotiations, set clear expectations from day one and establish a regular check-in schedule to ensure you’re always on the same page. A trustworthy partner will be upfront about their capabilities, timeframes, and how they handle client onboarding capacity and business scaling.
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Conclusion
Ultimately, a solid BPO partnership is about working together, not competing or conflicting. To streamline your derivatives operations, it’s all about focusing on specialized expertise, leveraging technology, and fostering transparency.
Ready to take the next step? Contact Prodktr, and we’ll help your way to optimizing your trading, middle-office, and back-office operations with greater efficiency.