23 September 2017

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Retired Member

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Doing more with less: a problem or an opportunity?

28 September 2016  |  16923 views  |  0

With increasing regularity, I’m hearing more and more banks saying that they are faced with having to do more with less - almost a mantra for our times.

 

The facts that support this are obvious. The burden of regulation is adding huge overheads. Market conditions are difficult. There’s a squeeze on margins and revenues are declining. More pain, less gain.

 

It’s a tough conundrum but one that needs to be confronted and resolved in timeframes unheard of just a few years ago.

 

The role of technology

Technology is feeding in to both the problem and the solution. There’s an exponentially increasing amount of data pouring into firms, in different formats, from a huge number of disparate sources, then needing to be sent to even more reporting entities. But by using new technology, we can implement intelligent automation to deal with this data, reducing headcount and cutting costs.

 

The central propositions of many of the new fintech, post-trade challenger players are:

  • A huge reduction in total cost of ownership
  • The adoption of self-service tools
  • Improved speed of deployment and production use

 

Gone are the days of banks investing in ‘nice to have’ services and for most firms the proposition has to be: keep in line with regulations and/or show a cost reduction within a matter of months.

 

Many of the more recently available fintech services and SaaS platforms have been adopted to ‘do more with less’ and retire expensive, labour intensive and on-premise systems. The cloud is now a well-accepted medium for hosting (although that has taken too long to become recognised as a secure and cost effective path) and it is a wonder why some institutions still put up barriers in protection of their acres of data centre space and armies of internal IT staff and contractors.

 

A change in mindset

 

Those firms who have grasped the notion of self-service tools have been able to rapidly reduce headcount, and increase efficiency, by avoiding the death roll of business requirements being put into the vortex of internal IT development cycles.

 

However, it still remains that a large proportion of financial services firms cannot rid themselves of the build vs buy mentality in commoditised and non-value-add processes. Amongst some, there’s a steadfast insistence of maintaining the old, expensive, clumsy systems of the 80s and 90s.

 

Around this time of year many firms are in 2017 budget planning mode. Given the current market conditions, and need to cut costs and headcount, it would be encouraging to see a shift towards intelligent, agile solutions that actually manage to achieve more with less.

 

PS. The ‘more’ is not about to get any ‘less’. A recent survey has suggested that by 2020, there will be 20 times more data circulating in the global financial markets. One thing is for sure, the vast majority of this data will need to be sent to the regulators. Data is now the battleground – some winners and some losers will soon emerge. 

 

TagsPost-trade & opsWholesale banking

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