10:29 pm - Monday December 18, 2017

Integrated Global Capital Market Platforms

Banking, Financial Services and Insurance vertical – BFSI in short – is the only global industry which is totally risk savvy and thrives only by acquiring and managing risk.

BFSI players need therefore delivery of seamless governance, risk & compliance and leveraging analytics.  On a dynamic basis they will need to standardize, sophisticate and manage data. Provision of real time customer service is a must through customer relationship and value enhancement.

 Business intelligence and analytics driven decision making abilities in the high volume-high value- high risk environment are the marks of a truly sophisticated and successful BFSI player.

Therefore, some of the key drill down factors that would facilitate BFSI risk management better are:  Improved data collection and management, Improved quality control, New risk and compliance analytics & automation, Portfolio monitoring, Refining product / pricing strategies, Enhanced workflow and Document management.

This would imply that the BFSI players may need to move away from the conventional multiple data sets, varied formats, time sequences and quality & standards.

McKinsey Global Institute (MGI) recent research highlights two distinct developments that look set to sweep the markets in the years ahead:

  • the continued growth and deepening of global capital markets as investors pour more money into equities, debt securities, bank deposits, and other assets around the world
  • the soaring growth of financial markets in emerging economies and the growing ties between financial markets in developed and developing countries

These are clearly picked up from the continued growth of global financial assets, ever-deeper financial markets, growing cross-border investment links and surging emerging markets.

However, Scaling to higher transaction volumes, Improving client service and productivity, Managing global risks across assets real time, Improving investment performance balance with risk, Responding more quickly to evolving market conditions, Pursuing geographic and business expansion to support revenue growth and Increasing innovation in financial product offerings to improve client service – are some of key challenges faced by the Capital Market Players.

Some trends that are recently and frequently seen in the BFSI markets are: uncertain markets and economies, regulations and investors’ protection, global BFSI industry convergence and globalization at the macro level and anemic volumes and electronic trading at the micro level.

Some select strategic responses like transparency and disclosure, channel integration and rationalization, enhanced data analytics, improved operational efficiency, improved data management strategy, organic  growth, etc., could provide the required support to the BFSI players

May be, as a one shop stop, innovative and future proof global integrated services platforms may come in handy for the BFSI players to manage these ever changing market conditions, changes and challenges, to help increase speed to value enhancement and delivery.

These open, modern platforms can meet the business needs of end user customers of Capital Markets today and in future with resources, methodologies and a culture committed to customers’ success with direct business benefit in the form of reduction in implementation time and total operational cost.

These Integrated Global Platforms are the need of the hour mainly from strategic business perspective which may include (1) reconsidering business models: channels, profits, operations (cost, processes), (2) reconsidering every line of business: grow, hold or fold, (3) understanding and integrating risk management into operations and  (4) transforming business, productivity and outcomes.

They can deliver

–          Channel growth, enrichment and integration

–          Shifting technology to a variable cost model (right sourcing, outsourcing)

–          Process automation coupled  with cost reduction  to improve operational excellence

–          Focused experimentation with emerging technologies

–          Replace /upgrade legacy technologies

–          Planning, bundling and pricing of the product / service spectrum

Development of such integrated global platforms  could be attempted by pursuing select initiatives such as – upgrading low latency infrastructure,  upgrading valuations and analytics capabilities, improving data management, governance and analysis, strengthening counterparty credit risk management, optimizing electronic trading tools, developing cross asset class trading and risk management, expanding compliance capabilities, integrating systems to improve uniform and  enhanced end user – customer experience, improving client accessibility and transparency, supporting efforts to move to a customer centric relationship model, modernizing systems for operational efficiency, re-engineering business processes, etc.

Though it may look so simple, however, these integrated global platforms can be constructed and delivered only by those with strong line of finance business acumen and with IT and application skills. Only they can visualize and deliver process improvement and IT rationalization with a view to deliver the ultimate cost reduction in delivery by constantly focusing on best practices.

In short BFSI players need for lean, mean and clean integrated global platforms can be designed and delivered only by financial technology players.

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