Navigating the Challenges: A Bumpy Road to Scalability of Prime Broker

Prime brokers in the cryptocurrency sphere play a crucial role, serving as the entry point for institutional players into the world of cryptocurrency operations. However, like any company, prime brokers face certain challenges that can impact their efficiency and client service levels.

The issue

Prime brokers manage a multitude of daily operations, encompassing tasks such as funds management, reconciliation, and infrastructure maintenance. With the steady expansion of the client base, the operational workload experiences a pronounced surge, placing the broker at a juncture fraught with the potential of overloading their back office employees and infrastructure.

The cascading consequence of this challenge was the manifestation of operational delays for the primer broker at the centre of the current case, which, in certain instances, resulted in non-compliance with Service Level Agreements (SLAs) established with clients.

Initial findings

To address this problem, the first step was to analyse and classify the operations performed in the back office. We engaged in close collaboration with the team to cultivate a profound comprehension of the existing workflows.

Our efforts involved gathering relevant numerical and statistical data to support our recommendations with solid evidence. Subsequently, we transformed this information into a more intelligible and enhanced documentation format. This documentation was intended for the utilisation during the optimisation process and to empower the team in making informed decisions.

As a result we have ascertained that the primary bottlenecks in team operations manifest during the processes of funds movement checks and processing. A noteworthy revelation is that a substantial 80% of these processes were carried out manually, a practice that significantly exacerbated the incidence of errors and contributed to pronounced delays.

Solution

To address the issue, it was necessary to reduce the volume of routine manual operations and implement a solution to detect errors in a timely manner, especially those arising from manual tasks that couldn't be automated.

As a result, a new classification of operations was devised, enabling process optimization tailored to each type of operation. The most substantial improvements were realised through the division of operations into 'risk-free' and 'risky' categories.

With our support, the team adeptly implemented full automation of 'risk-free' operations, resulting in notable improvements in both processing speed and accuracy. In order to proactively mitigate errors, an independent reconciliation system was created to monitor financial flows and promptly detect any discrepancies.

Results

Through our collaborative efforts with the prime broker team, a notable transformation was achieved within the back office operations. The back office successfully scaled to accommodate a 50% increase in daily transaction processing, not only meeting the demands of current volumes but also paving the way for future scalability.

This substantial enhancement in operational capacity was paralleled by a significant boost in the overall system's resilience, approaching an impressive 100%. Over the past six months, the system has exhibited exceptional reliability, marked by an absence of downtime or critical errors. This outstanding performance underscores the effectiveness of our joint initiatives and the robustness of the system's architecture.