Firms need collaboration to keep up
*Q&A hosted on FTF News: Click here to read the original article
Q: What kinds of collaboration did you encounter during the early part of your career?
A: Throughout my years working as an Operations Manager in banks or brokerages, and then working at tech companies, I have seen the term ‘collaboration’ be used in all sorts of ways. Initially, fintechs provided education, as the technology was much newer, and banks needed guidance on how to use the technology to reduce cost by eliminating manual processes. Easy wins in high volume, low complexity environments.
At that time, collaboration meant finding a vendor who was able to clearly define what problem they could address, implement a ‘quick’ solution, and provide a ‘decent’ level of post-production support. There is nothing wrong with this approach; it allowed banks to redeploy resources into higher value tasks, improve accuracy, reduce errors, and diminish costs.
Today, vendors cannot get away with providing solutions that merely do the same thing – but a little quicker. We are operating in a much more complex world of multi-everything – multi-jurisdiction, multi-regulation, and multi-systems. That one-size-fits-all approach will not lead to a growing and resilient organisation. This means real collaboration must exist between vendors and clients.
Q: What did you learn from those early collaborations?
A: Back in my banking days, systematic automation was new, so we welcomed a consultative approach from vendors. However, due to the prescriptive nature and technical limitations of the available solutions it left very little room for true partnerships to develop and innovate; if additional requirements came along that did not fit the ‘one size fits all’ model, they were not addressed, and placed on the back burner for another day. And that was ok. But now the complexities of what a bank is addressing is so different – complex derivatives, increased regulatory oversight and ever-changing data integrity challenges mean that the only way to really get on top of these issues is for customers and vendors to pool their resources.
Q: What are the downsides for financial services firms that resist collaboration internally and among vendors?
A: They will get left behind. There are many cases where firms have followed the mantra of ‘if it ain’t broke, don’t fix it’. But as the technology landscape changes rapidly, they have quickly found themselves branded as legacy, with solutions that are unable to handle the demands of current market volatility. Recovering from such a position is a real uphill task and, unsurprisingly, many fail.
Q: What are the key ingredients for fintech collaboration both for the firm and the vendor?
A: For the firm, it is all about looking for a partner with some key characteristics; market understanding, flexibility, and agility, and those that stand shoulder-to-shoulder.
I am always impressed as to how Gresham excels in its ability to accept not just the more commonly recognised industry standard data sources, but also being able to thrive in a world of the non-standard. Gresham’s solutions are both flexible and agile enough to ensure they can process numerous third-party systems or data sources by utilising advanced technology components that drastically reduce the effort and onboarding time associated with traditional reconciliation solutions.
A good example of this can be seen by the burden placed upon organisations complying with regulations such as the US Consolidated Audit Trail (CAT) or MIFID II. Fulfilling this requirement needs both an industrial strength solution capable of processing very high volumes quickly, but also one that can understand the complexities associated with the data. Additionally, for firms to be really focused on addressing these and other key challenges, they must be prepared to adopt an open attitude to a collaborative partnership, willing to accept not just affirmation of their processes but also willing to consider fundamental changes in their approach.
Many institutions are still struggling to combine both these traits into their current process and so we have been approached to collaborate with them to address this need. The reason Gresham is an ideal partner is that we are small enough to really care about our customers’ outcomes, yet are high in technical expertise that when combined with the banks in-depth understanding of their business and the challenges they face, which creates optimal collaboration where both partners can achieve outstanding results.
Q: How have the complications from the global pandemic impacted the notion of internal collaboration?
A: We are well equipped to deal with extraordinary events such as the global pandemic from a connectivity standpoint; using tools that help facilitate close collaboration is our bread and butter. That is not to say that COVID-19 has not had an enormous impact on our lives and is reframing the ways we work as an industry. In the long-term, I believe the pandemic will act as a catalyst for collaboration; by creating conditions which favour a digital environment, the need to innovate, think outside the box and leverage pockets of expertise across the ecosystem becomes essential to survival.
Further reading: Mark Bolton further explores what true collaboration means