The Stock Exchange of Thailand pursues an ambitious IT program to gain competitive advantage.

For The Stock Exchange of Thailand (SET) to transition from mutual ownership to a for-profit public company, it realized it needed a strong business strategy. One component is developing an extensive five-year IT program that would position the company to compete against other regional powerhouses.
 

Founded in 1975, SET’s mission is to be a prime choice for capital raising and investment management by offering integrated financial products and services through reliable and accessible platforms. Its products include a composite index, equities, bonds, derivatives, exchange-traded funds and derivative warrants. As of year-end 2009, the exchange listed 471 companies across eight industry groups.

SET began developing its new IT master plan in February 2009. It already had an electronic trading platform for equities and a derivatives-trading platform but wanted advice meeting the requirements of its strategic business initiatives. The exchange needed to organize IT, develop governance, establish reporting lines and assess how to work effectively with the business side of the organization.
 

According to Pannaporn Sapsomboon, Senior Vice President, Group Head IT Operations at SET, a roadmap for both the technology and IT management had to be drawn. Its implementation would
constitute a major change. “We involved all the users and management, along with brokerage firms and regulators such as the Securities and Exchange Commission and the Central Bank of Thailand,” she says. “We also set up a working group to review the plan.”
 

After an intensive selection process, NASDAQ OMX Advisory Services was brought in as a project consultant in June. They interviewed and gathered information from a large group of stakeholders and developed nine strategic IT recommendations, two involving significant IT investments.

NASDAQ OMX advised the exchange to buy rather than build systems where possible and to hire staff with an understanding of the business requirements.

Communications can be improved by setting up a common project office with both business and IT, and introducing new services for brokers to generate revenues. In addition, there is an opportunity to introduce new customer-oriented functions within IT, such as having someone responsible for working with independent software vendors, brokers and customers. Advisory Services also suggested ways to consolidate existing applications, networks and databases.

“We offered recommendations for developing an IT master plan emphasizing the importance of working with a common infrastructure, having the right requirements on trading and post-trading technology and developing commercial IT services,” says Stellan Råberg, Head of Advisory Services. “Much of our work, however, was on people, processes and organization.”

Ultimately, SET’s goal is to leverage the new IT plan to become a leading exchange in the region, offering trading in all asset classes. Sapsomboon admits that competing with Singapore, Malaysia, and Indonesia is a challenge. She adds: “You have to aim high, right?”

By Tom Groenfeldt

Illustration: Valero Doval