Technology Update

JPMorgan ups the ante in clearing

Banking giant spends $100M on Morcom brokerage platform

Nov 7, 2010 @ 12:01 am

By Davis D. Janowski

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Although it may be one of the less glamorous parts of the JPMorgan Chase & Co. empire, the bank's J.P. Morgan Clearing Corp. subsidiary has done something exciting in the area of technology.

The bank spent $100 million and invested the efforts of 650 employees from throughout the company on Morcom, its new brokerage platform. The effort has resulted in the total rebuilding and consolidating of the brokerage technology systems Morgan inherited in 2008 when it acquired The Bear Stearns Companies Inc. and that firm's Private Client Services unit.

Shorthand for Morgan Communications, Morcom is a browser-based, online broker workstation and portfolio management platform meant for broker-dealers.

With an entirely new front end built using Flex technology from Adobe Systems Inc., the Morcom user interface is in many ways a broker's or adviser's dream, giving the user access to the exhaustively comprehensive set of clearing and custody tools available from Morgan.

In large measure, the system is designed to attract more broker-dealer clients for the bank's clearing business. It's already used by almost 3,000 advisers and brokers within Morgan and by brokers and advisers at the bank's 200 broker-dealer clients. In March, J.P. Morgan Clearing added to that roster by acquiring the clearing and custody business of asset manager Neuberger Berman Group LLC, putting an additional 50,000 client accounts and $173 billion in assets on the books.

The desire to be more customer-friendly and allow developers to add new features quickly were the main reasons project managers selected Adobe Flex for developing the new user interface.

“It provides us a great gateway for viewing our data on a real-time basis, a one-stop shop,” said Vasantha Butchibabu, an operations manager at Neuberger Berman, adding that the user interface has proved very easy for the firm's asset managers to learn.

The drag-and-drop modules available in Morcom, which allow users to customize and populate their desktops with specific tools, have proven very popular, she said, adding that she and her colleagues have been impressed with the speed and responsiveness of the platform, especially given that it is an online offering that provides real-time connectivity.

“It also works around entitlements, meaning that from a control point of view, we can decide which of our users get access to particular screens and data,” she said.

Neuberger pays no separate fee or charge to access the technology, as it is an integral part of the clearing and custody arrangement the firm has through Morgan.

Real-time dashboards, extensive reporting capabilities, automated account opening and dozens of other features were shown to me during a lengthy demonstration of the platform by Russell Cassar, head of technology for the Broker-Dealer Services group.

The dashboard provides advisers with real-time views of more than 40 client and account events that include everything from client documents awaiting completion to margin call alerts.

Since Morcom is a broker workstation, trading features are at its core. Using the platform, advisers can seamlessly trade from client accounts at multiple locations on the interface, including the screens for account holdings, security cross reference and unrealized gain/loss.

There also are multiorder features and automated break points that assist advisers with the complex process of determining rights-of-accumulation amounts on the purchase of mutual funds.

“We probably have spent as much on the dashboards and giving the user an aggregated view of their business in one place as we did on anything else,” Mr. Cassar said. “We have added about 29 different screens [for that] alone.”

As much as I like to think technology is crucial to all business decisions these days, that is not always the case.

When asked whether the new Morcom platform took center stage in Neuberger Berman's decision to use Morgan, Ms. Butchibabu had this to say: “To be honest, no, it was not pivotal, but it certainly is nice to have.”

[To read a bit more detail on the platform visit my blog entry, Morcom: Details from a demo]

For more information visit JPMorgan's Broker Dealer Services group site online.

E-mail Davis D. Janowski at djanowski@investmentnews.com.

Related Stories:

Clearing firms count on the appeal of crossover technology

Making a switch pay

Neuberger Berman taps J.P. Morgan as custodian

Penson buys Ridge clearing business for $35 million

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