Duco’s Revenues Trend Higher on Core Product Segments, Regulatory Changes

Duco Cube helped fuel the group's business in 2016, with shifting regulations and an emphasis on SaaS driving revenues.

Duco, a UK-based provider of self-service data normalization and reconciliation services, has reported an updated iteration of its year-end financial results for 2016, which featured strong growth in clients and development of key product segments. This includes an increasing emphasis and use of its main product, Duco Cube, which provides on demand reconciliation services that can be analyzed on a web based front-end.

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Looking at its core business, Duco has managed to improve its global footprint in both New York and London, two of its most active markets. With offices in both locales, as well as Luxembourg, Duco has largely benefitted from the upcoming legislation of MiFID II, which will transform the regulatory playing field as of January 2018.

Regulatory Focus Driving European Growth

As such, a key driver of demand at Duco in terms of its UK and European business was Duco Cube, as the passage of MiFID II will necessitate a growing emphasis on new reporting regimes, transparency measures, and internal controls. With Duco Cube already catering to firms grappling with such regulations mandated under EMIR and MiFID, the upcoming MiFID II regulation has only added to this trend, helping streamline costs and other legacy constraints.

US Business Rises on SaaS Demand

By extension, Duco experienced strong growth in its US segment in 2016, due to increases in take-up requests in listed derivatives and greater demand on the buy-side in general. Additionally, Duco’s US business has also been the beneficiary of Software as a Service (SaaS) platforms becoming more of a uniform trend across the financial services industry. According to a recent Gartner research study, SaaS is slated to expand by more than 20 percent in 2017 alone, reaching upwards of $46.3 billion.

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Moreover, over the next seven years, over half of large enterprises are likely to have successfully implemented an all-in SaaS strategy. This growing macro trend and emphasis on SaaS delivery should also help Duco’s US business grow in 2017 as well as more firms adopt these strategies.

At a personnel level, Duco also strengthened its business by adding several key hires in the form of senior management – additional appointments that focused on research and development, client services, and commercial expansion have also helped fortify its global business.

Business Highlights

Duco’s updated financial results saw an annually recurring revenue (ARR) growth of over 100 percent in 2016, coupled with a 50 percent increase in new clients throughout its US and European segments. Manual reconciliation time has also been a major emphasis in 2016, as Duco Cube’s clients have saved upwards of 5,000 man hours per day.

Furthermore, Duco has embarked on multiple deals with key industry players, ranging from global banks and brokers and buy-side firms. Last March, Duco launched an agreement with CME Group to restructure its respective member firms’ fee control processes. More recently, Duco has also inked several partnerships with other venues, such as Societe Generale Bank & Trust (SGBT), which helped automate its securities, cash and internal system-to-system reconciliations.

Christian Nentwich

According to Christian Nentwich, CEO of Duco, in a statement regarding the results: “We have had yet another strong year and Duco is well positioned for further growth. As cost pressures, upcoming regulation and the search for efficiency continue to shape the industry, there is an ongoing shift from legacy processes to using agile, quick-to-deploy technology.”

“We continue to set the standard in this space with a SaaS-based platform that’s live in 24 hours from contract signature, with return on investment in 30 days. Only Duco provides a self-service reconciliation tool that truly puts business users in control,” he added.

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