Positioning firms in the capital markets sector for long-term growth and success built around four key pillars.
Positioning firms in the capital markets sector for long-term growth and success.
The capital markets space is undergoing profound change and an increasing number of leaders are recognizing that the status quo is no longer an option. Many have begun seeking out opportunities to either exit unprofitable businesses or diversify into new areas and cut costs. However, the traditional approach to cutting headcount and sending non-core functions offshore is no longer adequate. On the contrary, these are short-term fixes against the backdrop of a much larger paradigm shift.
These organizations are under incredible pressure to simultaneously support the overall business strategy, pursue ongoing cost efficiencies and comply with the demands associated with an evolving regulatory landscape – while at the same time working to transform their operating models to reflect the realities of a changing marketplace.
KPMG’s Operations and Technology Transformation program helps firms effectively navigate the complex process of strategizing, prioritizing and implementing initiatives that will allow them to transform their operations and technology environments. There are four steps to rethinking operations in the capital markets sector.
1. Leverage operations, technology and data to make strategic business decisions
As part of the process of expanding to new regions and introducing new services, it’s imperative for firms to leverage their current delivery models in operations, technology and data. They also need to find ways to differentiate their service offering and/or expand to other strategic areas of the value chain. As more firms see their traditional revenue sources erode, these moves into new service areas can serve as a defensive necessity.
2. Pursue sustainable cost reduction opportunities
There may be opportunities to transform what were once considered ‘one-off’ cost-reduction initiatives into sustainable, ongoing cost-management business capabilities. In addition to addressing short-term cost pressures, this can help position them favorably when market conditions improve. As such, providers can manage their operations and technology functions like standalone businesses, creating product differentiation models and reducing unit costs.
3. Establish mechanisms to manage the transformation
Providers are well-advised to establish governance models and deploy program management teams to support the C-suite stakeholders throughout the transformation process. Once the technology vendors have been identified, a detailed roadmap and delivery framework should be established, along with mechanisms to track progress and manage risks.
4. Mitigate risk through improved data management
Many firms are being forced to rethink their risk management models. One of the central themes in this area is data management. In order to support the intensive reporting requirements in the target operating model, firms will require strong, flexible information management systems that possess a high degree of data integrity. Data management will continue to become an increasingly important competitive advantage going forward.
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