14 Nov 2017

FIMA 2017 – Conference Highlights Challenges and New Opportunities in Financial Services

I was very pleased to attend FIMA Europe last week – a forum for Chief Data Officers (CDOs) and senior-level data professionals from top banks and asset management companies – to discuss how to meet regulatory reporting requirements faster, support internal decision making, create the right data culture, and identify better tools and architectures.

It was a jam-packed agenda, with the themes being ‘Generating New Opportunities from Data’ on day 1, and ‘Adding Value through Insight and Innovation’ on day 2.

I thought I’d share some of the key takeaways from the event:

  • The cost of financial institutions conforming with new regulations is extremely high and it is expected to grow. A recent survey of asset managers, brokers and banks reveals that circa 5% of revenue is currently spent on compliance and this is expected to rise to 10% by 2022. The immediate focus was on MIFID, PSD2 and GDPR.
  • 80% of IT budgets are spent on maintenance, leaving little time for anything new.
  • The management of data is becoming ever more important, therefore the role of the Chief Data Officer is growing in profile and popularity. Organisations may build their businesses on data, but they don’t necessarily manage it well. That’s why CDOs play an increasingly valuable role in helping organisations value data across the enterprise. CDOs are on the rise in regulated industries.
  • Data is the new oil. Data is an asset and the goal is to leverage the data to increase revenue, reduce cost and increase efficiency.
  • Asset managers, brokers and banks are at different levels of maturity, in their capability to manage data. With some having organised their data and working on “offensive data strategies”, while most focused on “defensive data strategies”.

Following the event I concluded that:

  • Transitioning .NET and Java applications to cloud-native technology is perhaps the best way to reduce cost allocated to IT maintenance – which is currently at 80% of the overall spend. This will also create more room for innovation.
  • ESB integration will continue to play a key role in making data available, and there is a growing requirement for API Management to implement regulations PSD2 and Open Banking.
  • Standards are the answer to reducing the regulatory burden. An example of this is the “FIBO” standard object data model across finance which has been developed by the EDM Council. If the regulators adopt the standard it could significantly reduce the effort in complying with regulations as the data will be stored in the same form. There are a number of innovative solutions capable of loading in such an object-based/graph model such as InterSystems IRIS.

At Integrella we have a number of offerings which would deliver against these points:

  1. The Integrella ‘Digital Fast Track’ helps companies make their transitions to digital. Transitioning to cloud native, for example transitioning in-house apps to OpenShift (either on premise or in the cloud) fall into this category.
  2. We have a number of offerings in the ESB and API Management space, and are partners to some of the top vendors in this area. This will help those looking to take implement regulations PSD2, Open Banking and the others taking effect soon.
  3. We are also longstanding partners to InterSystems, and are helping customers to implement an industry standard object model using FIBO and InterSystems IRIS.

It is a challenging environment out there, but we think there are plenty opportunities for cost savings, increasing efficiency and gaining market share by improving customer experience.

We’re keen to speak to FS companies who might benefit from our offerings – we can advise on whether you’re on the right path and how best to make the changes required.

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