Long reads

2021: Reinventing the Financial Services Value Chain

Joe Channer

Joe Channer

CEO , Delta Capita

The banking environment is becoming increasingly challenging for smaller and mid-sized firms to operate. The costs of the ongoing regulatory agenda and the need to focus on improving truly client differentiating capabilities - powered by modern technology such as Artificial Intelligence (AI) - is almost impossible to achieve on your own. Banks are constantly distracted from their core purpose and this needs to change.

The pandemic has shown us that where there is a crisis, there is also an opportunity. While it is unlikely that we will ever return to pre-Covid normal, there is huge potential to grow, learn and emerge stronger. For example, we have seen that the impact of Covid-19 on financial institutions has put even more pressure on firms KYC teams, whilst regulatory requirements and deadlines have remained unchanged. 

Having exhausted many internal options - including the promise of new technology initiatives over the years - many firms are now having to look at alternative options that guarantee improved service cost levels at reduced prices. These include managed services and lift out options such as those offered by Delta Capita. The life cycle for many internal and vendor CLM technologies are coming to an end and firms will need to agree on how best to achieve a step change in their CLM capability.

If you look at almost any other industry in the world, the shift to supply chain models has already happened - banking is one of the last to go. Banks need to learn the lessons of more mature industries like the automotive industry, where there is clear differentiation between mass production and luxury marques, but with many shared common components with a supply chain that is taking advantage of specialisation and economies of scale.

In 2021, banks - and more broadly Financial Services firms - must focus on what’s differentiating for their clients and consider alternative approaches to everything else. The biggest opportunity for capital markets firms this year is to think beyond traditional operating models and harness the true potential of new technologies.

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