When minutes at the trade desk can save days in Operations

At Gen10, it’s our goal to empower busy traders and operators to work more effectively by freeing them from tedious manual administration and by automating contract processing.

Shuffling papers and copying information between systems or documents is not a productive use of these skilled professionals’ time, and in a world of shrinking trade margins, is a distraction that trading companies can ill afford.

Automating commodity trading

Gen10’s cloud-based apps can automate a wide range of trade processes that improve asset turnover, profitability and outcomes for traders; from deal capture through to shipment management and invoicing. Once data is entered into one app, it is automatically populated in other areas of the system and can be shared with other technologies too. The apps also use this information to create documents such as shipping/warehouse instructions and invoices.

Automation also takes care of approvals and other processes that can slow trades down due to their reliance on coordination between multiple teams. If trades need to be approved before they progress, you can take advantage of pre-approvals (such as checks against counterparty credit limits), workflows that route approvals to the relevant manger, or a combination of both. This means both faster and more compliant trading, with less time spent on deals that will not be approved.

The advantage of using these automated workflows is the increased flexibility they provide. Gen10’s Workflow Engine can be adapted to your existing processes to reduce friction between teams, speed up trading and reduce the risk of errors – without changing the way you do business.

This automation frees traders from less-valuable activities and allows them to instead focus on their areas of expertise. The knowledge and skills of experienced employees remain as important as ever, with opportunities for your people to review the outputs of the workflows to add even more value. And the combination of less administration and better access to data (such as real-time MTM and P&L reports) empowers high-performing traders and operators with better optionality.

A culture shift

In Gen10’s experience, operations teams are usually quick to see the benefit of the extensive logistics features and automation, but these benefits can be less clear to traders, who often face the biggest change in working practices when implementing commodity management apps. Particularly if traders are used to older repository-style CTRMs, they sometimes see the amount of information in Gen10’s Contract.Manager as representing an addition to their workload rather than the workload reduction that it is designed be.

This is because commodity management apps allow traders and operators to complete everyday tasks within the app – for example adding a quantity, weight basis and tolerance within the app does not just create a record for reporting; it populates the contract and all other documents as well. This is a radical departure from older ways of working when the information input to a CTRM or report was used only for reporting and did not help progress deals.

In a modern commodity management app, adding more information when the contract is created has an immediate downstream benefit for operations and risk management as well as trading teams. Taking the extra six minutes at the trade desk can save six days in the delays caused by approvals or mistakes in older systems from not providing this information up front.

In Gen10 apps, financial and legal pre-approvals mean traders no longer need to wait for approvals or spend time on deals that will not be progressed. There is less time spent correcting errors and less need for operations teams to come back to traders with requests for more information. And in the current climate of lower margins on each trade, the shorter finance periods this creates are essential. Traders also save significant amounts of time and energy as the reports take care of themselves, based on the actions traders are taking as part of their everyday flow of work.

Gen10’s commodity management apps also use the information to provide traders with complete position visibility and optionality. Traders have instant what-if analysis, P&L and MTM data that updates whenever they make a change to a deal or new market information is received, meaning they have the data they need to improve their strategy and their performance. And the more information traders add to contracts, the more accurate their P&L is due to the richer detail, without the trader spending more time on reports.

Traders also gain more flexibility in how they operate using commodity management apps. Traders can leave many of the details to operators if they know that the back office will be faster and more efficient than themselves. But if they have a strategy for particular contracts, or prefer to have more control, they can quickly and easily populate their instructions for the automation workflows to add.

Gen10’s apps give traders a new way of understanding the value they can gain from commodity management technology. The greatest results are achieved from embracing this new way of working and taking the additional time initially that will save traders time overall, provide better risk reports and give them better position visibility. These benefits all lead to more profitable trades and shorter finance periods that create increased turnover and a further boost to profitability.