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Time to give the client more control

In the latest instalment of our series entitled ‘A transformation is coming’, Jeremy Taylor (Specialist in Operational Processing and Derivatives) argues that the principle of client self-servicing is far more beneficial to investment banks than many in the sector would have you believe.

Client self-servicing is a well-established operating principle in digital businesses. In fact, within the banking sector, retail banking is already offering a high degree of self-administration and self-processing to customers through internet banking services. However, investment banking is way behind and, it has been argued, is less suited to a client self-service operating practice.

This deserves revisiting. Investment banking operations face off to a wide variety of external clients and parties (fund managers, counterparties, large corporate, custodians etc.) and to many internal customers too (front office businesses, finance functions, risk, compliance etc.). Many operations information demands, particularly those of a data enquiry or data reporting nature, could easily be serviced with a form of self-servicing utility. This can be a website based facility or an internet protocol based data interface service. Potentially, for certain types of client, system to system application programming interface (API) connections could become the most effective way to achieve operational client interaction in the long term.

Another aspect of self-servicing is the adoption by clients of centralised market utilities for the common data that they give to all their counterparties (e.g. standing settlement instructions). These services can be used by a bank’s operations function as definitive client data sources upon which processing activities can be performed more reliably.

The prize here is the significant reduction in workforce dedicated to telephone support and the production of information reporting, as well as increased client value, as information becomes available on-demand in and out of normal working hours. Client portal and web technologies are already available to deliver these capabilities, so the challenge is mostly about integration with core processing systems and the connection to market utilities and services.

Client self-service means that aspects of operational work become shared and consequently the bank can do less, particularly for less profitable clients. Further, if a client adopts market services and utilities to perform certain operational activities (e.g. to maintain their reference data), these duties are performed centrally once and for potential use by all that client’s counterparties.

Client self-servicing in investment banking only requires the adoption of the very same web based technologies that are already widely used in retail banking and other industries.

It is a low risk, easy win strategy.


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