In December 2015, we published a White Paper, in conjunction with Avaloq, to create a benchmark for the industry on ways that private banks in Asia can run their back offices more efficiently to reduce operational cost.
A key objective for those people tasked with running technology, operations and strategy at private banks in Singapore has been to assess the extent to which they can reduce operational costs – while at the same time ensure that what they build is suitable for Asia in helping them deal with the various challenges this region poses across many banking platforms.
What is unsurprising about the results of the research is the fact that most banks say they face the same problems and hurdles to act as barriers on the pathway to the resolution of their issues. Whether it is keeping up with ever-changing regulations, the increasingly high cost of meeting compliance obligations, the need to drive a new digital mind-set and culture, or ensuring information security and protection – finding solutions to manage and overcome these keeps many banking leaders awake at night. But they are taking different paths to deal with these challenges.
The approaches they are trying range from integrating and streamlining different legacy components of the business, to coming up with new digital offerings through innovative apps, to building their technology in new ways with different delivery models, to outsourcing more of the middle and back office functions – especially in light of the regulatory burden and concerns over information security. In general, the view on developing and managing technology, operations and systems-related projects is a longer term one.
Banks have realised the shortsightedness – and, ultimately, more costly nature – of the “sticking plaster” solution as they go. There is also more of a structured approach to the way some banks are planning and designing their projects – both on their own and with a closer involvement of vendors and consultants. This stands to favour those banks which are taking more of a longer term approach to building a sustainable business.
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