Survey: Ops Execs Enjoy New Decision making Status on Wall Street
Securities operations executives are taking a more active role on internal swat teams to find ways for their firms to reduce costs and increase efficiency on an enterprise wide basis, says a survey released on Monday morning.
The survey conducted by Broadridge Financial Solutions and IBM Global Business Services conclude that outsourcing business operations remains a viable option with ops staffers playing a greater role in their firms' strategy. They no longer have to wait until end of year budget meetings to be heard.
The survey profiled 133 C-level operations strategy specialists in the U.S., UK, Hong Kong and Singapore at brokerages, universal banks and fund management shops. The responses were consistent among geographies and industry sectors. Broadridge is one of the U.S.' largest outsourced technology providers whose platforms are hosted by IBM.
"Business line operational managers are participating on enterprise transformation committees to achieve a more holistic approach to operational efficiency and revenue generation rather than only a unit-level strategy," says Ron Lefferts, financial markets industry lead at IBM Global Services in Armonk, New York. "That approach involves taking an overall front-to-back office view rather than a narrow unit-by-unit analysis."
In terms of instigating and influencing operating model change, chief operating officers ranked as the chief drivers- 84 percent- on par with chief executives at 83 percent. About sixty percent of the respondents say that their chief operating officers are driving strategic business change; more than half say that their chief operating officers are driving product and service innovation and about 60 percent say their COOs are driving "organizational agility" and delivering benefits beyond cost savings.
As heads of the new enterprise transformation committees, the COOs are reviewing opinions and data provided by line item specialists before making a decision to eliminate duplicative technology and operations in favor of shared services. "Organizational agility consists of rationalizing operating platforms and in-house functions where it is not core competency," says Mike Hopkins, president of fixed-income and risk for securities processing solutions at Broadridge.
Among those surveyed more than 60 percent of financial firms identified as "leaders" are outsourcing their settlement and clearance functions while 55 percent are doing so for back-office accounting and valuation and 53 percent for report and statement generation. Those are all services offered by Broadridge on an outsourced basis. The study did not break down which percentage of firms preferred to outsource their entire book of middle and back office operations rather than single or multiple processing functions.
A dozen senior-ranking bank and brokerage operations executives in New York and London contacted by www.iss-mag.com early Monday confirm that they have been given a greater voice in company-wide budget discussions, particularly when it comes to cost reductions. It is far more difficult to wield any clout when it comes to onboarding new products.
"We are sometimes notified late in the game and have to scramble to figure out how to rewire our middle and back offices," says one operations executive at a London broker-dealer. "Of particular concern is how to adapt trading security master, accounting, risk management and payment systems."
Outsourcing operational work does provide some breathing room but still requires operations executives to establish solid data management and reporting communications with any third-party agent.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)