In a survey of almost 1200 business and technology executives from across the globe, conducted by IBM and SWIFT, it was found that, more than a year after the global financial crisis exposed the industry’s failure to properly manage risk, further investment to improve risk management capabilities is still a top priority, as is enhancing flexibility to comply with impending regulatory reform.
Outsourcing and collaborative solutions were widely seen by respondents as the best way to maximise the efficiency of the most commoditised functions such as back office processing. However risk management is considered too critical a function to entrust to a third party, and was identified by most respondents as one of the few areas in which exploiting outsourced and collaborative services is not being considered.
According to the survey, 21% of respondents would consider creating a shared payments utility with other financial institutions, and 41% would consider outsourcing their electronic payments processing.
Almost half of respondents to the survey identified technology initiatives as a major focus for strategic investment within their organisations. Close to a third are planning to implement a service-oriented architecture (SOA). This is an architectural approach allowing a bank to design and deliver its IT capability as business-oriented services rather than by legacy monolithic applications. SOA therefore enables banks to design IT services that can be built and adopted across lines of business, facilitating shared services (such as corporate actions, reference data, payments) on a cross-product basis so reducing both operations and IT costs and increasing responsiveness and efficiency.
There were some differences in priorities for IT spending, with securities players intending to focus more on reinforcing existing capabilities, while payments players are more focused on innovation. Securities businesses are engaging in platform replacements to upgrade legacy systems, enabling better automation and unlocking greater capacity. Meanwhile the priorities of payments businesses are centred on the development of new services, such as electronic and mobile payments.
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