Unanimously in your recent interview with Tradtock, you highlighted how risk and compliance equipment are running for institutional adoptions of digital assets. Can you expand on how the institutions are taking advantage of these devices?
Larger financial institutions usually work with well -installed processes that require strong framework for risk and compliance. Many institutional customers make the same demand, if not more, strong risk and compliance tools in digital assets, are similar to what they know in traditional markets. In particular, we have sought sophisticated portfolio and risk engine tools to institutions to manage our digital asset portfolio with our traditional strategies or asset classes.
In Talos, we have responded by expanding our platform to include a portfolio management risk solution that supports asset managers in their investment process. Institutional customers trading and take advantage with a spectrum of counterparts; It can include centralized and decentralized exchanges, OTC liquidity provider, as well as detention solution providers. A single, real -time view of its positions and complete risk risk makes institutions to manage their complex digital asset operations efficiently.
Asset manager, in particular, prefer portfolio compliance enforcement and monitoring, which is a fundamental requirement of any institutional-grade portfolio management system. From both an investment and regulator perspective, the enforcement component prevents orders from violating compliance regulations, while monitoring components alert the portfolio managers and compliance officers for the threshold violations caused by exposure drifts.
Do you think that the speed will continue to carry forward the institutional adoption of digital assets?
The speed for institutional adoption will continue to be governed by some major factors.
First, the emergence of reliable operators within the digital asset space: they will act as a bridge, which simplify access to institutions in the search phase. As market leaders, they have shown a track record and have a deep understanding of how to operate digital assets safely and effectively in markets. They will support the next wave of investor’s demand for access.
Second, operating equipment: As the tooling matures to institutional standards, large asset manager and funds are rapidly deployed client-faceing offerings on a scale.
Finally, the emergence of a perfect operating model: Once an investment committee decides to go to “0 to 1” and launch a strategy of a digital assets, whether it is client–faceing crypto products, services or investment funds, the important step is determining the important step operating model. In digital assets, it presents many unique challenges, as technology, market and regulatory requirements are rapidly changing. Institutions should evaluate whether the model will perform on an institutional scale for the institutional scale, and from both a trading and operating point of view, their current technology needs to assess from the stack of how soon they want to enter the market. Rebuilding an existing traditional property system is an incompetent path.
In Talos, we have advised several institutions in both Buyside and Sellside to enter the digital assets market. In severe, we have helped apply a wide range of operating models, and as a result, the correct models are well deployed to guide an institution through the complications of the installation of the correct model.
During your panel discussion, “Navigating the future of crypto markets“You talked about the need to bridge Tradfi and Crypto Infrastructure. What should the institutions consider to integrate Crypto Infrastructure with a Legacy system?
When integrating the crypto infrastructure with the legal system, institutions must first identify what their strategic edge is. For example, asset manager and hedge funds dedicated a considerable amount of resources to adapt and maximize their alpha through the best-in-class research teams, model and investment strategies.
Tellos has participated with many of the world’s largest financial institutions, and we have seen institutions rapidly ramping their integration and deployed their investment strategies when they are provided with tight, protesting and safe access in the market. In our experience, institutions require solutions that are modular and flexible, so that they can basically integrate their digital asset infrastructure with their current workflows.
Finally, institutions should prioritize infrastructure that is designed for the scale and a toolkit that is made aimed at customizing major trading needs such as delay, hedging, leg risk and market impact.
