3:06 pm - Sunday September 26, 0934

Interface Management in Investment Banking

It may be surprising to those who are not directly involved in investment banking activities that the success in this branch of banking depends directly (and only?) on the ability of the various interfaces that facilitate investment banking processes at various stages. One may agree with this statement if one were to browse through the list of such interfaces in investment banking.

Interface Management is concerned with systematic facilitation of all communications among machines (or applications in a ‘professional’ language) that support a process operation.

Investment banking has become ‘hi-tech’ these days. Gone are the days (when I made my humble entry into investment banking) when almost entire operations were done manually. And naturally the multi tasking human skills were relied upon. These days, thanks to technology inroads, investment banking has become highly dependent on technology support one can think of. Therefore the success of investment banking operations depends on the technology support it can receive.

May be increasing competition, rise of emerging markets, more complex supply chains, rapid change in customer preferences, growth of online business, growth of social media, volatile economic environment, fast changing regulatory environment, changing technologies and demographic change have made investment banking more and more technology intensive. A “one size fits all” approach to interface management is neither reasonable nor practical. The approach must be risk based and tailored considering the complexity of investment banking operations.

Some important interface management considerations are – What information is required? What is the critical content? Why is this information important and how will it be used? Who will use this information and who is authorized to provide it? What is the mode and style of communication? One way or two ways? When is this communication required? Regularly scheduled or event triggered? How is it documented? Is there a record of occurrence?

Oh. This is becoming more of a pure management discussion. Let us look into the sample list of interfaces that are required to support investment banking activities.

Interfaces with

  • Market price providers (e.g. REUTERS, BLOOMBERG, MARKIT)
  • Stock Exchanges (e.g. NYSE, DAC, NASDAQ)
  • Clearing houses (e.g. CHAP, CHIP, FEDWIRE, ACH, CREST, EUROCLEAR, FASTER, GIRO, BACS, RTGS, CLS)
  • Mortgage Brokers (e.g. Chesapeake, Deutsche Leasing)
  • Credit Rating Agencies (e.g. Moody’s, Equifax, CRISIL, S&P)
  • Depositories (e.g. DTCC, NSDL)
  • Financial messaging networks (e.g. SWIFT)
  • Clearing and settlement houses (e.g. CLS, DTCC)
  • COTS products (e.g. Calypso, Summit, Opics, MUREX)
  • Credit Bureaus (e.g. CIBIL)
  • Messaging Standards (e.g.FIX, FPML, ACORD, ISO 8583)
  • To comply with ISO 2022 for SEPA
  • Various internal applications and General Ledgers
  • Devices (e.g. printers, mobiles, passbook printers, scanners Embossing Machine, SMART Card Interface, Bar Coding, MICR, OCRInterfaces, SMTP eMail Servers)
  • Imaging System (e.g Filenet, Documentam, G360 , Interwoven, Objective, Alfresco)
  • Regulators and Central Banks (e.g. Fed, RBI, SEBI, SEC)

I tried my best to bring out the list comprehensively. I might have missed some. Now, one may agree. Interface management in investment banking is very crucial for business success.

Well. Another interesting development is emerging. In the days to come, interfaces with social media may also be required in investment banking. Though this may not be acceptable from compliance (internal or external) angle as of now, the need is slowly arising.

We don’t need a ‘miracle’, Right? You may agree!

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