{"id":43244,"date":"2023-07-19T09:23:35","date_gmt":"2023-07-19T08:23:35","guid":{"rendered":"https:\/\/www.elixirr.com\/?p=43244"},"modified":"2025-10-31T10:27:51","modified_gmt":"2025-10-31T10:27:51","slug":"dont-miss-the-boat-partnerships-are-the-key-to-financial-excellence","status":"publish","type":"post","link":"https:\/\/www.elixirr.com\/en-gb\/dont-miss-the-boat-partnerships-are-the-key-to-financial-excellence\/","title":{"rendered":"Don’t miss the boat: partnerships are the key to financial excellence"},"content":{"rendered":"\n

The reputation of an investment bank hinges on its products, service quality, and public trust. However, beneath these pillars of customer experience often lies a considerable reliance on manual operational processes and outdated in-house technology infrastructure. Why?<\/em> Traditionally, investment banks have favoured internal development and maintenance of all products and services, driven by notions of pride, \u201cprestige” or the imperative of risk management. Despite recent efforts to prioritise client-centricity and enhance the client experience, the operational machinery supporting these goals has remained largely unchanged \u2013 albeit some tactical fixes, given the complexity and degree of investment required to remain current. <\/p>\n\n\n\n

For executives at these institutions, a compelling question arises: how can genuine client-centricity be achieved when a significant portion of the budget and resources is consumed by running an operational machine that is not even optimal?<\/em> The answer is straightforward: it is time to focus on leveraging your strengths and reputation while entrusting capable partners to excel in handling the remaining aspects.<\/strong> <\/p>\n\n\n\n

Go back to basics and focus on your roots <\/strong><\/h2>\n\n\n\n

Investment banks must invest valuable time in actively participating in industry-led discussions, positioning themselves as trailblazers or swift followers of trends that promise enduring client demand. While the term “providing a seamless client experience” is widely used as a catch-all phrase for implementing these digital banking solutions, its true essence embodies several crucial facets: <\/p>\n\n\n\n

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  1. Creating infrastructure that provides global market access<\/li>\n<\/ol>\n\n\n\n
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    1. Empowering clients with intelligent, real-time data for a competitive edge in their trading strategy <\/li>\n<\/ol>\n\n\n\n
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      1. Structuring a global view of clients across all business lines in the bank, augmented with publicly available information for a seamless and proactive experience<\/li>\n<\/ol>\n\n\n\n
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        1. Providing real-time visibility and self-servicing to enable autonomy<\/li>\n<\/ol>\n\n\n\n
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          1. Building an ecosystem where clients have access to a network of complementary services from within your bank<\/li>\n<\/ol>\n\n\n\n

            In addition to all these functions of client experience, it is crucial for banks to maintain constant vigilance when monitoring risk threshold. This involves determining the level of risk the bank is willing to take on and therefore the type of clients and business it should be looking to attract and be competitive in. The way in which this risk is managed shapes the bank’s ability to attract clients and conduct business in comparison to its peers. To achieve this, the bank must establish robust internal risk management and control measures that are consistently evaluated in line with evolving regulations. By doing so, the bank safeguards itself against regulatory action and negative publicity, preserving the essential element of public trust\u2014 an indispensable cornerstone of a bank’s esteemed reputation, as emphasised from the outset. <\/p>\n\n\n\n

            What does this mean for processes and services? <\/strong><\/h2>\n\n\n\n

            The speed and degree of technological innovation has surpassed the ability of most investment banks to handle internal operational processes that support the evolving client needs. While keeping these processes internal may have been manageable in the past, many investment banks now struggle to provide specialised services. Instead of trying to keep up with innovation, it is time for investment banks to concentrate on their core strengths. They should explore new revenue streams by offering their strongest services as third-party offerings and collaborate with specialist firms to use their superior capabilities, where optimal.  <\/p>\n\n\n\n

            Times have changed \u2013 \u2018partnerships\u2019 is no longer a taboo word for investment banks <\/strong><\/h2>\n\n\n\n

            The traditional approach of benchmarking operational processes solely against peers to determine what \u2018good\u2019 looks like has become insufficient in the ever-evolving landscape of investment banking. To truly excel, investment banks must now expand their horizons and benchmark themselves against not only their peers, but also technology firms and outsourcing providers. Even the esteemed Tier 1 banks have recognised the need to forge partnerships with technology firms and other banks to outsource certain operational processes, acknowledging that they are better off when they partner with the industry experts.    <\/p>\n\n\n\n

            A prime example of this shift can be seen in the case of MUFG<\/a>, which outsources its custodian provider to benefit from Citi’s technology capabilities and extensive sub-custodian network. This allows MUFG to pass on value-added benefits and cost efficiencies to its clients. Similarly, prominent institutions like BNP Paribas<\/a>, Barclays<\/a> and Credit Suisse<\/a> have teamed up with FIS <\/a>to offer innovative futures and cleared over the counter (OTC) servicing. This collaboration helps them address the challenges of increased volume and decreased margin by centralising critical post-trade tasks onto a market-leading, fully funded system. <\/p>\n\n\n\n

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            In today’s landscape, investment banks facing constraints in terms of budget, expertise or resources must recognise that they cannot surpass all market competitors in every service or process to offer top customer experiences. <\/p>\n<\/blockquote>\n\n\n\n

            Others are developing value-add services and setting the pace of industry innovation, therefore enabling a wealth of additional beneficial capabilities to tap into. By embracing this new paradigm, partners have the opportunity to be valuable contributors to the banks’ overarching mission.  <\/p>\n\n\n\n

            By forging strategic partnerships, banks have access to a realm of expertise and cutting-edge solutions, propelling operational efficiency, streamlining processes and slashing costs. Clients may not even realise that certain tasks are seamlessly handled by trusted third-party providers. Moreover, these dynamic third-party firms evolve at an astonishing pace, enriching banks with an array of additional benefits to seize upon. Take, for example, Finastra<\/a>‘s introduction of ALM IQ, a groundbreaking solution empowering community banks to revolutionise their risk and compliance management for their balance sheets. This compelling narrative underscores the transformative potential that partnerships unlock for investment banks. <\/p>\n\n\n\n

            Worried about losing control? This is just a myth<\/strong><\/h2>\n\n\n\n

            It is imperative to debunk the misconception that partnerships equate to loss of control. A well-executed partnership is the epitome of control. Establishing clear service level agreements (SLAs), robust escalation paths, and transparent handshakes, alongside stringent quality controls and regular evaluations, form the bedrock of any thriving third-party relationship. Additionally, it is crucial to implement effective governance and processes that encompass the following key aspects: <\/p>\n\n\n\n