During the Great Recession of 2008, money market fund (MMF) holding details were almost unavailable, and MMF investors had no visibility into their risk exposure. During this time, ICD Portal provided its clients with manual portfolio counterparty exposure reports. Soon after, ICD created the industry’s first automated exposure analytics application and in so doing began ICD’s transformation into the world’s largest independent institutional trading and investment risk management company with current assets over $120 billion. ICD CEO, Tory Hazard, recently sat down with CIO Applications Magazine to discuss ICD’s continuous technology advancements and unwavering focus on customer service that has earned ICD a unique place in the financial industry.
Could you highlight the offerings and advantages of ICD Portal? How has your AutoPay product enhanced ICD’s offerings?
ICD Portal is a SaaS trading portal with a customizable platform that enables clients to uniformly research and trade hundreds of short-term investments like MMFs, deposit accounts and CDs in seven different currencies. Clients can ensure they are investing within their investment guidelines by utilizing ICD Portal’s compliance features that block trades and monitor portfolios. ICD Portal ingests additional trade information from electronic trading platforms providing access to thousands of additional investment opportunities in virtually every currency. Those positions are included with ICD Portal products providing clients access to a dozen consolidated reports on portfolio balances, performance, counterparty exposure and much more. The on-demand portal intelligence and reports empower clients to efficiently derive insights for investment decisions and manage investment risk to optimize their portfolios. Trade information, daily rates and dividend reinvestment files are sent from ICD Portal to treasury management and enterprise resource planning systems, analytics engines and other platforms to automatically update balances and earnings in all client treasury technology systems.
With regard to AutoPay, our Chief Technology Officer, Mark Heyner, designed a secure automated settlement solution using SWIFT and public key infrastructure standards to trigger wire requests from approved trade tickets. The AutoPay feature, developed initially at the request of one of ICD’s first clients, Cisco Systems, has since been deployed for many of ICD's largest clients. The technology leverages ICD's proprietary encapsulated security tokens, constructed with concentric digital signatures in a manner similar to blockchain, to prevent portal-directed wires from going anywhere but the client’s pre-approved trading counterparties.
In providing normalized research and trading in one place, integration with treasury technologies, settlement automation and consolidated reporting, ICD clients can more effectively manage their short-term portfolios while saving dozens of hours of work every month.
The technology developed by ICD follows an Agile methodology which allows us to adapt to the dynamic priorities and evolving needs of our clients
Transparency Plus is the industry’s first SaaS-based exposure analytics application, which again traces its roots back to the financial crisis of 2008. In its seventh major release, the patented technology is at the core of ICD’s investment risk management offerings. With one click, the technology enables investors to understand their portfolio’s aggregated exposure to all counterparties, countries, sectors, maturities and more. In addition to ratings, Transparency Plus provides leading indicator metrics to allow users to quickly evaluate the relative financial strength of the counterparties in their portfolios. Leading indicator metrics include credit default swaps, stock pricing trends, capital adequacy and ratings. Additionally, the powerful technology generates rich performance data and compliance reports to confirm portfolios are compliant with client-specific investment guidelines.
While the system is intuitive and customizable, ICD created a risk management best practices methodology to maximize the power of Transparency Plus, DACOA (Diversify, Analyze, Comply, Optimize and Archive), which won a Treasury Today Adam Smith Award for Best Practices and Innovation.
Treasury departments have reported that Transparency Plus alone has saved them an average of 25 hours each month and over $25,000 in data provider costs.
Tell us about the strategies that you follow to better your services.
We are a horizontal management organization with our team comprised of former treasurers, MMF executives, traders, analysts and Certified Financial Planners who collaborate with clients and our technology developers to continually enhance our solution offerings. In fact, we can proudly say that we have implemented hundreds of client-introduced enhancements. Being a SaaS provider, improvements proposed by one client ultimately benefit all clients. The technology developed by ICD follows an Agile methodology which allows us to adapt to the dynamic priorities and evolving needs of our clients.
Could you give us a case study to help our readers better understand ICD’s service offerings?
A Chinese multinational company approached ICD with their challenge to improve their MMF trading process. Theirs was a labor-intensive and time-consuming process that included researching several sites to decide on investments, sending various emails and faxes for approvals and confirmations, and double entering their trades into their treasury management system. ICD provided them with uniform trading protocol for researching and trading and also automated several processes, reducing their daily trading from 3.5 hours to 30 minutes per day.
What are the noteworthy accomplishments of ICD? Also, what, in your opinion, does the road ahead look like for ICD?
We care about what our clients think and seek their feedback each year in a client survey. In 2018, with a 50 percent participation rate, 99 percent of our clients scored ICD’s customer service as excellent or above average, with the vast majority selecting excellent. Our extraordinary customer service, superior technology and continuous innovation has led to a 99.6 percent client retention rate and 35 percent compound aggregate portal balance growth rate for the past five years. Last year alone, over $2 trillion were traded on ICD Portal.
On the innovation side, ICD was the first portal company to launch European operations when we opened an office in London in 2005. We were the first portal company to release an exposure analytics application in 2010. We revolutionized the industry with the integration capabilities we built into our 2011 next generation portal. We were the first portal company to launch a secure automated settlement solution in 2013. We led the industry in U.S. money market fund reform solutions in 2016 and are currently developing solutions for European money market fund reform.
Moving forward, we continue to enhance our technology offerings, aggressively add investment products to ICD Portal and expand geographically to stay in front of our Fortune 500 and FTSE 250 client needs.