Technology vendor of the year: Murex

Risk Awards 2021: new models, huge volumes, remote working – but Murex hit 95% of development plans

Maroun Eddé, Murex chief executive

As Covid-19 raced across the world in February last year, financial institutions flipped into crisis mode. So did the technology vendors on which they rely. With more than 300 organisations in 60 countries using its MX.3 trading, risk and back-office system, Murex had to step up, quickly.

“We had to invent a new normal for ourselves, on the spot,” says Maroun Eddé, the firm’s chief executive.

Among other things, this required a fundamental change from being reactive – waiting for clients to raise an issue – to being proactive. Here, the firm could take advantage of the fact that a dedicated team was already assigned to each client. The team knew the client, and the client knew its team.

Those existing ties helped both sides respond rapidly to events that were outside their control. When oil prices went negative in April, for example, CME Group switched its options margin model from Black-Scholes to a Bachelier model – and Murex had to do the same.

“Initially, we moved quickly to address it tactically and now we are building it more formally into our application,” says Eddé.  

Elsewhere, the vendor found itself reasonably well prepared – in large part, thanks to the financial crisis of 2008. It had already built scalability and robustness into MX.3 for the large-volume trading of some of its major bank clients, so it coped with surges in activity. It already had a multi-curve, multi-currency framework that could handle negative interest rates. And it had a proprietary stochastic local volatility model in its foreign exchange derivatives module that helped capture that market’s extremes.

“If we had not had the financial crisis before the pandemic, we would have had to make a lot more improvements to our platform,” says Eddé.

As the initial pandemic panic eased, banks realised they had lots of skilled people at a loose end at home, as well as a host of projects that had been temporarily shelved. They wanted to get back to work.

“Here, we also had to be proactive,” says Eddé. Delivering new applications entails a web of collaboration, including Murex, systems integrators, a bank’s IT and the business end-users. “We had to come up with a way to make the whole process work end-to-end with everyone sitting at home,” says Eddé.

New priorities

The same was true for the firm’s own development work, whether to meet client requests, perform maintenance or progress strategically. Clients inevitably become involved with all of these projects, either piloting or implementing functionality. “We had to find a way of integrating them into this new development chain,” says Eddé.

The challenge was doing this quickly and company-wide. Murex employs more than 2,300 people across 17 global offices.

“The way we have always managed the company is to have one strategy for one platform, which is shared by everybody, whether their role is commercial, support, project delivery, development, marketing, legal or human resources,” says Eddé. “We were able to mobilise everyone quickly through the channels we use to maintain this one-company approach.”

As clients re-engaged, they reshuffled priorities. Projects in areas like real-time risk management or analytics took precedence. Converting projects that were already underway prior to the pandemic to the new way of working was reasonably straightforward. Getting new projects underway was harder.

System selection typically entails teams of a dozen or more from the bank and the vendor sitting down to discuss requirements and system specifications, followed by demonstrations and negotiations. This could not be easily transplanted into the virtual world. As many have discovered over the past year, the dynamics and etiquette of online meetings are different from face to face, and establishing new relationships via video conferencing can be fraught.

The way we have always managed the company is to have one strategy for one platform, which is shared by everybody

Maroun Eddé, Murex

“We found it is essential to get the agreement of the institution that what we are trying to achieve is difficult, to get a commitment they want to go ahead and then establish at the highest level how we will work together,” says Eddé.

This typically means convening in smaller groups, and accepting longer timeframes. “Some of the processes that might have taken six months can now take nine months to a year. It doesn’t mean it is a failure, it means it is a different way of working,” says Eddé.

It proved surprisingly effective, he adds: “If you had asked me before the pandemic, I would have said we could perhaps maintain about 70% of our product development in the virtual world, but we have been able to achieve more than 95% of what we had planned – which is close to miraculous.”

Like its clients, Murex now faces the question – what next? There is little expectation that post-pandemic working will snap back to its pre-pandemic pattern, but it’s not clear what will take its place.

A very different attitude is also emerging, about how much change is possible, how quickly it can be achieved, and how much it should cost. Banks have pointed out that, had they asked their IT departments prior to the pandemic to devise a way for 95% of staff to work remotely, the result would likely have been a multi-year project with a substantial budget attached.

“And then Covid happened and they did it in weeks,” says Eddé.

Another consequence of the pandemic is an acceleration of the digitisation of capital markets processes, and greater openness about software being delivered as a service rather than being installed on premises.

None of these changes are entirely new. What the pandemic is doing is dramatically speeding up existing trends. “Certain trends we thought might take three to five years may now just take one or two, so we have to find ways to accelerate our delivery,” says Eddé.