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Dec 14, 2016, by Andy Efstathiou
Most FinTech engagements to date, with the exception of Blockchain, have been focused on consumer banking, a business characterized by high volume, high standardization, and low value transactions. By contrast, commercial banking is characterized by low volume, high customization, and high value transactions. And from an operational perspective, commercial banking uses higher value e[...]
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Nov 29, 2016, by Andy Efstathiou
At HCL’s recent adviser and analyst event, #HCLBigLeap, I spoke with their banking industry executives about HCL’s strategy and activities designed to drive application maintenance and modernization services, and specifically about the key ISV partnerships that are enabling this.
Background
HCL was founded in 1976, and had a strong focus on manufacturing during its [...]
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Oct 07, 2016, by Andy Efstathiou
Over the last five years, banks have been focusing their operational investments and executive mindshare on compliance, and in this time the cost of compliance activities has increased ten-fold. Also, in the last three years, the focus for compliance has been on customer profile activities that utilize reference data – e.g. Know Your Customer (KYC), Anti-Money Laundering (AML),[...]
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Sep 23, 2016, by Andy Efstathiou
NelsonHall attended the IBM Forum for Financial Services event in New York this past week, which focused on how bank customers are using IBM’s cognitive offerings. IBM has been investing heavily in services and technologies to enable deeper insight into financial institutions’ customers, starting 18 months ago with the development of Watson-based analytic assets.
IBM’s the[...]
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Sep 05, 2016, by Andy Efstathiou
I attended Cognizant’s biannual analyst event in New York recently and spoke with their head of blockchain consulting. Cognizant has been investing heavily in services and technologies to enable the digital enterprise, including the blockchain technology stack. Eighteen months ago, Cognizant began developing blockchain assets based on various open source frameworks, and today they have o[...]
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Jul 22, 2016, by Andy Efstathiou
The media, and vendor marketing departments, have described RPA as a compelling technology for enterprises, based on its perceived ability to reduce operational cost. However, our review of case studies and BPS vendor offerings reveals a more complex set of drivers at work. Here I take a brief look at examples of the application of RPA in the banking sector.
The banking industry has been ch[...]
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Jul 07, 2016, by Andy Efstathiou
Here I take a look at how platform-based business process services (BPS) is yielding benefits for retail banks – specifically, delivering manual processes with greater efficiency, increasing automation, and delivering transaction products at scale.
Delivering manual processes with greater efficiency
Retail banking (RB) BPS is a large-scale, mature business with high adop[...]
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May 06, 2016, by Andy Efstathiou
At its recent Confluence client and stakeholder event, Infosys outlined its overall business strategy, based on the belief that BPO as it is delivered currently will be replaced by business process as a service (BPaaS) delivered on virtual stacks within a few years. Here I take a quick look at the Infosys vision and its application within financial services.
Infosys described the transition to [...]
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Mar 30, 2016, by Andy Efstathiou
In the retail banking BPS market assessment I am currently undertaking, several key trends are emerging regarding which processes are being outsourced and why. Banks do not outsource all processes at once, and selecting the highest priority processes to outsource can be reduced to an analysis of two key dimensions:
Margin: where profit margins are highest, usually with new processes or produ[...]
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Mar 16, 2016, by Andy Efstathiou
Financial institutions are seeking to deepen their operational capital in order to drive down cost of operations, increasing fixed cost and reducing variable cost (non-linear cost reduction). Here we look at two examples of how institutions are achieving this by partnering with third party operations vendors.
Capital Markets Client with Broadridge
In this example, Broadridge is providing a p[...]
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Feb 11, 2016, by Andy Efstathiou
Much has been written about FinTech in banking. However, the focus has been on functionality enablement and consumer experience, with little insight into what the limits of FinTech benefits might be (and how that would shape an implementation strategy) or how banks can enable a roadmap that drives process improvement. Here I address both of these questions.
What are the reasonable goals of FinT[...]
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Jan 21, 2016, by Andy Efstathiou
There has been a recent spate of acquisitions and partnerships among Financial Services BPS vendors which reveals interesting trends. These include the following deals from 2015:
HCL and CSC: Two JVs were formed, whereby HCL will operate and expand the existing Core Banking business of CSC. The first JV will focus on account management and delivery governance while the second [...]
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Dec 03, 2015, by Andy Efstathiou
In Q2 2015, the U.S. Department of Labor issued a notice of proposed rulemaking, changing the definition of who can be considered a fiduciary to a retirement account or plan. The rule, which is currently in a comment period and should be implemented by Q2 2016, extends fiduciary responsibility to advisors, many of whom are currently under a less strict suitability standard of care. The U.S. govern[...]
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Nov 17, 2015, by Andy Efstathiou
Payments processor Worldline has agreed to acquire Equens for cash and stock in a multi-part transaction expected to close in Q2 2016, with both parties claiming this to be a transformational deal. Here we take a look at the details of the deal and assess the impact it will have on the European payments market.
Criteria for success in payments processing
The payment processing industry is a [...]
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Nov 03, 2015, by Andy Efstathiou
The major capital markets custodian firms recently reported Q3 2015 financials. The custodians provide critical operations support to global capital markets, and their performance provides an early warning measure of the state of the capital markets industry in general. Here we look at the performance indicators for BNY Mellon, State Street, and Northern Trust, reflect on the implications for the [...]
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Oct 14, 2015, by Andy Efstathiou
The most important development in U.S. banking BPS in the last five years has just been announced (it may still not pass the U.S. Congress, but this analyst believes that too much pressure will be applied by industry for Congress to block it).
The announcement is that the signatories to the Trans-Pacific Partnership (TPP) have reached an agreement on the terms of the trade agreement and will no[...]
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Oct 14, 2015, by Andy Efstathiou
NelsonHall has just published a market assessment on Analytics and Reporting (A&R) BPS in banking and capital markets (BFS). This is an emerging BPS market with few significant competitors, and adoption from only a few institutions who are tier 1 banks in mature markets. There are many vendors of point A&R solutions, but no standard or dominant vendor has emerged to manage the process valu[...]
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Jul 14, 2015, by Andy Efstathiou
I recently attended Genpact’s industry analyst and advisor conference, at which the vendor described its approach to success in a time of rapid change for enterprise operations delivery. It believes that most enterprises are ‘cemented’ in the wrong place due to challenges with legacy processes underpinned by legacy technology, and that enterprises unable to adapt quickly will die[...]
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May 13, 2015, by Andy Efstathiou
Today’s capital markets industry is severely capital constrained, and this is likely to get worse over the next few years. Internal deployments of new or improved solutions will become harder to resource (both in terms of cash and manpower), and managed services will be the preferred way to improve operations. Furthermore, managed services that offer to improve process and/or vendor manageme[...]
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May 07, 2015, by Andy Efstathiou
Over the past few weeks the major payment processing vendors have reported first quarter 2015 financial results, and they show a noticeable slowdown n y/y growth from 2014 (refer to NelsonHall Tracking Service articles for detailed analysis of the quarterly results). Summary results for Q1 2015 (in USD unless stated otherwise) are as follows:
Card networks:
Mastercard: +2.7%&nbs[...]