19 October 2017
Find out more

Bank cost-cutting driving uptake of financial industry utilities

17 February 2016  |  18707 views  |  1 File sharing

Top tier banks are increasingly open to the adoption of utility-based shared service models to drive down costs and increase efficiency in back office and compliance functions, according to research conducted by Finextra.

The survey of 102 financial services professionals from 69 financial institutions across 26 countries, conducted by Finextra on behalf of Capco, found that three main areas noted as ripe for growth include: market and reference data management, reconciliation and exception management, and regulatory and compliance-related reporting.

As many as 73% of respondents are prepared to use a utility model in the data management space, while 61% see it as a driver for straight-through processing in reconciliation and exception management.

Banks polled believe the third party utility approach can help to cut costs, cope with variable volumes and achieve predictable service and quality levels.

Scott Claus, head of the Technology Services Domain, Capco, says: “The greatest single insight from the survey is confirmation that, by failing to take full advantage of the utilities model, especially in the compliance context, banks are unnecessarily leaving money on the table. They are paying too much, and still experiencing too much internal disruption and distraction, just to play catch-up.”

Roughly two-thirds of those surveyed agreed compliance is a significant driver of utilities uptake, but only about a third have begun actively working towards implementation of such a model. Attitudes are changing, however, with an additional third readily admitting they would now consider a utility model to help them achieve regulatory maturity.

“A utilities approach can deliver very significant benefits, both for institutions that have already exhausted traditional sourcing routes and, even more so, for those who have not yet engaged with extensive process rationalisation,” says Farzine Fazel, head of Sourcing Offerings, Capco. “The timescales to reaping cost savings benefits are typically quite fast, around 24 months. And the benefits are greater and more sustained than ‘traditional’ sourcing.”

Full report:» Download the document now 2.1 mb (PDF File)

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 19 February, 2016, 09:59

Kudos. Shared Service Utilities in areas like KYC will also help customers who currently have to submit copies of the same document to different banks while shopping for financial products and, sometimes, to buy different financial products even from the same bank.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Big banks team on reference data utility

Big banks team on reference data utility

06 October 2015  |  6780 views  |  0 comments | 13 tweets | 12 linkedin
Large banks could save $4bn per annum by creating a trade processing utility - Broadridge

Large banks could save $4bn per annum by creating a trade processing utility - Broadridge

22 September 2015  |  5123 views  |  0 comments | 2 tweets | 12 linkedin
Swift extends KYC Registry to funds and custody

Swift extends KYC Registry to funds and custody

28 May 2015  |  7338 views  |  0 comments | 10 tweets | 9 linkedin
Markit, Genpact sign 600 firms for KYC portal: appoint CEO

Markit, Genpact sign 600 firms for KYC portal: appoint CEO

11 November 2014  |  10919 views  |  0 comments | 6 tweets | 6 linkedin
FIS and Credit Agricole launch post-trade utility

FIS and Credit Agricole launch post-trade utility

04 November 2014  |  8739 views  |  0 comments | 3 tweets | 3 linkedin
DTCC and banks form client data and documentation utility

DTCC and banks form client data and documentation utility

29 July 2014  |  6851 views  |  0 comments | 4 tweets | 2 linkedin
FSB moots creation of global utility for fixing FX benchmarks

FSB moots creation of global utility for fixing FX benchmarks

15 July 2014  |  7123 views  |  0 comments | 3 tweets | 3 linkedin
London Stock Exchange partners Wipro to launch reconciliation utility

London Stock Exchange partners Wipro to launch reconciliation utility

09 July 2014  |  6761 views  |  0 comments | 6 tweets | 3 linkedin
Avox to double workforce as demand for reference data grows

Avox to double workforce as demand for reference data grows

11 April 2014  |  4336 views  |  0 comments | 4 tweets | 2 linkedin
Thomson Reuters joins KYC utility race

Thomson Reuters joins KYC utility race

19 March 2014  |  12462 views  |  2 comments | 9 tweets | 10 linkedin
DTCC partners banks on global utility for client reference data

DTCC partners banks on global utility for client reference data

30 September 2013  |  12929 views  |  0 comments | 6 tweets | 2 linkedin
Yorkshire and HP launch cloud-based shared service alliance

Yorkshire and HP launch cloud-based shared service alliance

29 August 2013  |  6257 views  |  0 comments | 6 tweets | 5 linkedin
FSB moots development of global trade data utility

FSB moots development of global trade data utility

19 April 2013  |  5584 views  |  0 comments | 1 tweets | 2 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Register nowvisit www.vasco.comvisit www.capgemini.com

Top topics

Most viewed Most shared
Ripple looks to drive bank adoption with $300m XRP rebate programmeRipple looks to drive bank adoption with $...
15786 views comments | 12 tweets | 4 linkedin
Swift positive on blockchain, but big challenges remainSwift positive on blockchain, but big chal...
8945 views comments | 16 tweets | 22 linkedin
satelliteGates Foundation backs Ripple collaboratio...
8040 views comments | 13 tweets | 10 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
7140 views comments | 9 tweets | 17 linkedin
Santander InnoVentures leads $6m funding round for Mexico's ePesosSantander InnoVentures leads $6m funding r...
6281 views comments | 6 tweets | 3 linkedin

Featured job

to £70K base, £105K ote, benefits
London, UK

Find your next job