Client Context and Strategic Imperative

In early 2012, our firm was engaged by a leading global investment bank to evaluate their index data management infrastructure and assess emerging platform solutions. The bank’s Delta One trading desk faced increasing complexity in managing index and ETF data, driven by rapid market growth and expanding product complexity. Their existing infrastructure struggled to efficiently process complex index compositions, track corporate actions, and manage dividend forecasting at the scale required by their growing business.

Consulting Engagement Approach

Our team initiated the engagement in January 2012 by developing a comprehensive vendor evaluation framework. Working closely with the bank’s technology and business stakeholders, we crafted a detailed Request for Information (RFI) document that captured both technical requirements and business objectives. The initial screening identified eight potential providers, each offering different approaches to index data management challenges.

In collaboration with the bank’s evaluation committee, we established a weighted scorecard methodology that considered multiple dimensions:

  • Data management capabilities carried the highest weight at 30%, reflecting the critical importance of accurate and timely index data processing
  • Technical architecture followed at 25%, emphasizing the need for scalable and reliable solutions
  • Operational efficiency accounted for 20%, focusing on workflow automation and exception handling
  • Cost structure represented 15% of the total score
  • Vendor stability and support made up the remaining 10%

By March 2012, thorough analysis of RFI responses had narrowed the field to three finalists, including SOLA, a newcomer developed by the veteran team behind Netik GIM (Global Index Management) and GEM (Global ETF Management). These finalists proceeded to the detailed Request for Proposal (RFP) phase, where they provided comprehensive documentation, pricing models, and implementation timelines.

SOLA’s Innovative Approach

During the RFP phase, SOLA emerged as a particularly interesting candidate. Unlike traditional platforms, SOLA introduced a modern technology stack with built-in ETL over HTTPS protocols and a web-based GUI that promised to transform how the bank’s traders interacted with index data. The platform demonstrated several innovative features that addressed longstanding industry pain points:

  • Real-time change tracking with complete data lineage
  • Standardized ETF calculation methodology across different index providers
  • Flexible basket definition supporting both notional and share-based approaches
  • Rapid basket calculations, with early beta clients reporting completion times around ten minutes
  • Comprehensive dividend reinvestment handling
  • Global market coverage with standardized processing rules

Technical Assessment Phase

Our technical evaluation began in April 2012, focusing on three critical areas: infrastructure requirements, data quality, and operational efficiency. Working with the bank’s architecture team, we conducted detailed assessments of SOLA’s modern architecture, which offered significant advantages in deployment flexibility and maintenance. The HTTPS-based approach simplified connectivity while maintaining security, contrasting favorably with traditional platforms requiring dedicated network infrastructure.

Data quality analysis revealed sophisticated handling of index calculations and corporate actions. The platform showed particular strength in standardizing methodologies across different providers, though this standardization occasionally raised questions about handling provider-specific nuances. We conducted extensive testing of dividend forecasting capabilities, a critical feature for the bank’s delta one trading desk.

Operational Impact Analysis

Through May and June 2012, our team focused on operational implications and user experience, working directly with the bank’s trading desk and support teams. SOLA’s modern interface demonstrated clear advantages in daily workflows. The bank’s traders particularly appreciated the ability to quickly visualize data changes and track their provenance, features that proved invaluable during high-pressure trading scenarios.

Support infrastructure emerged as a key consideration during this phase. While SOLA’s architecture simplified many aspects of deployment and maintenance, it represented a significant change in how the bank would manage their index data operations. Our team conducted a thorough assessment of training requirements and operational procedures.

Cost-Benefit Analysis

Working with the bank’s finance team, we developed a comprehensive financial assessment considering both direct and indirect costs over a five-year horizon. Direct costs included licensing fees, implementation expenses, and ongoing support charges. Indirect costs encompassed internal resource requirements, integration efforts, and potential business disruption during implementation. We developed detailed TCO models that accounted for different growth scenarios and usage patterns.

Risk Assessment and Mitigation

Our evaluation concluded with a comprehensive risk analysis that considered technical, operational, and strategic factors. Key areas of focus included:

  • Implementation risks related to technical complexity and resource requirements
  • Operational risks concerning system stability and support adequacy
  • Strategic risks regarding vendor stability and product roadmap

For each identified risk, we developed detailed mitigation strategies and contingency plans specific to the bank’s environment.

Engagement Outcomes

Our structured evaluation approach provided the bank with clear documentation of requirements, transparent scoring methodology, and comprehensive stakeholder engagement throughout the process. The methodology we developed has since become a template within the bank for similar vendor evaluations, demonstrating the importance of combining rigorous technical assessment with structured procurement processes.