New Era Of Networks is considering entering a new business--creating a service bureau to support connectivity to the Global Straight-Through Processing Association's transaction flow manager (TFM).
Douglas Jeffrey, Neon's newly named president of global financial services, says the vendor would target small fund managers globally who might be forced out of business once the TFM is up and running. He notes that there are many smaller fund managers out there that could not afford the cost of connecting to the network, once it is chosen, on their own.
Jeffrey says that it could cost a fund manager that is not yet fully automated $100,000 just to link to the TFM: $8,000 to join S.W.I.F.T., $40,000 to 50,000 for software, $20,000 for hardware, and various other costs. He says Neon might buy a S.W.I.F.T. alliance box under its "Service Bureau" license and share it with several fund managers. This would eliminate the S.W.I.F.T. fee and some of the technology costs for the fund managers. Using the service bureau approach, he says, would cost small fund managers some $20,000, rather than $100,000.
What's more, he says Neon has had discussions with Thomson ESG about a possible partnership to offer the service. If Neon were to go ahead with such a project, says Jeffrey, it would like to partner with a Thomson-like vendor-as it would like to offer valued added services such as trade confirms. Jeffrey added that Neon can't get to work on such a project until the GSTPA releases the API instructions, which it is expected to do later this year.