Clear Street Outlines Technology Enhancement Strategy

In a recent article in The Trade news, Clear Street management described some of the challenges that come with building a platform for multiple asset classes. The public US securities industry, which moves trillions of dollars a day, still relies on mainframe technology from the 1980s. These legacy systems are entrenched in manual processes and siloed data, resulting in costly errors and expensive technical debt. For many firms, replacing these antiquated systems would be like removing the engine from a plane mid-air. It’s time-consuming and difficult to execute with fragmented technology. Over the years, firms that rely on this antiquated technology stack have applied a facade of trendy solutions on top of an outdated core. However, this surface-level revamp of the interfaces can rarely hide the state of the underlying systems. These complex legacy environments often consist of a patchwork of systems that integrate poorly and require extensive reconciliations. In contrast, Clear Street is building a unified platform using cloud-native, event-driven, and horizontally scalable technology. From front to back, this system acts as a cohesive whole, consisting of hundreds of microservices that can seamlessly communicate via a library of APIs (application programming interfaces). This API-first approach lets Clear Street seamlessly add new capabilities. The firm started with clearing, settlement, and custody and subsequently added securities finance, risk management, and trading. The firm is rapidly building support for multiple asset classes, geographies, and investor types. Likewise, modernization programs are often needed to keep up with changes in market structure and other regulatory demands, like the SEC’s proposals regarding new investor communication processes, core trading changes, new position reporting demands, and the shortening of the settlement cycle to T+1.