IBM Beating Market Mandates

© 2012 IBM Corporation

July 2012

Beating market mandates:How winners are re-engineering financial markets operations

In collaboration with Broadridge Financial Solutions

IBM Center for Applied Insights



IBM and Broadridge sought out to uncover how leading financial market firms respond to volatile market conditions by evolving their operating models

In collaboration with Broadridge Financial Solutions1/15/20132



Facing turbulent market conditions, respondents highlighted regulatory requirements and demanding customers as standout drivers of change





“A lot of resources are tied up in dealing with regulatory changes. Other areas – new products, building scalability or efficiency, building new functionality or services – have to take a back seat.”

–COO, Universal Bank, Singapore

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Only a small group of Leaders excel at both innovation and compliance




A key differentiator: Leaders look outward while Laggards are still getting their houses in order





“Changes must enhance the whole process. It’s no good having a Rolls-Royce in the front and a Mini in the back.”

–COO, Universal Bank, UK

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Leaders design their operating models to be decidedly more client-focused, agile, scalable and collaborative – and they consistently outperform

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Client-focused: Leaders bring the front, middle and back office together to innovate and better serve their customers


“The better/more efficient our operations are, the more customized products

can be offered; this will allow us to differentiate.”

– COO, Investment Manager, US

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Agile: Streamlining operations helps firms respond quicker and more flexibly to changing market demands


“The Asian market looks for innovative products with very high risk and very

high volatility. If you have to offer these products quickly and effectively, and

manage them internally from a risk point of view, your risk management

infrastructure becomes extremely important.”

– COO, Universal Bank, Singapore

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Scalable: Using size and global coverage to gain competitive advantage


“We are looking to harmonize our systems and applications across the globe;

and then looking at how we manage the 24-hour clock.”

– COO, Universal Bank, UK

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Collaborative: Using new partnership and sourcing models to augment capabilities and share risk


“By finding the right partner, we can gain speed to market and best-in-class

offerings for our customers.”

– VP, Broker/Dealer, US

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Leading firms are much more likely to outsource certain processes, leveraging their partners’ capabilities




Followers and Laggards are turning their attention to operating model innovation – Leaders will have to work hard to stay ahead




COOs and CEOs have the most significant roles in driving and influencing change – but overall, it’s a team effort





“The role has changed in the last couple of

years from focusing on the day-to-day stuff to high-level business strategy. It’s about taking a step back and looking at the way we do things from a larger perspective.”

–COO, Broker/Dealer, UK

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To excel, you need to innovate your operating model… but are you ready?


� How does your client service compare with your peers? What sets your firm apart?

� Would clients say their service relationship with your firm revolves around them or around your organizational structure?

� Is your client service continually improving by design?

� How quickly can your operational support move from an initial product concept to launch?

� How rapidly – and cost effectively – can you respond to new regulatory requirements and client requests?

� Where could additional insights help improve operational processes and decision making?

� Are your current capabilities sustainable over time?

� When volumes decline, are you left with high stranded costs?

� Are you actively looking for opportunities to innovate through globalization?

� Should you be championing industry-wide shared services that reduce operational costs for all participants?

� Would you collaborate with third parties to provide necessary solutions?

� Are your sourcing decisions focused more on cost or competitiveness?

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Documents

IBM Beating Market Mandates