Via discussions hosted on the Capco Institute Blog, members debate high profile issues, with frequent and provocative contributions from Capco thought leaders. For institutions around the world, how will the changing financial services landscape form the future of finance?
Published January 14, 2015
What is Corporate (financial) Sophistication? Why does it matter? And what, if anything, can banks do about it? Pretty much unchallenged, banks used to provide corporate customers with a range of services, from payments processing to business extension financing. Then everything began to change, with the evolution of much greater financial sophistication in corporates’ handling of finance and financial services.
Published January 12, 2015
Nobody can ignore Apple Pay. And nobody is ignoring Apple Pay. Must-have designer technology, heavy hitting icon brand and high profile merchant signings have finally aligned, like so many stars in the payments heavens. Together, and for once the use of the well-worn cliché seems justified, they deliver a ‘user-friendly solution’ that accelerates us several million light years towards payments nirvana. We can at last empty our straining wallets of their multiple cards, coupons and vouchers and finally dispense with cumbersome forms of personal identity. Free to roam the malls of the world, we will be able to shop as the fancy takes, with just our smart phones to take care of the previously complex matter of funding our consumer gratification. We will, won’t we?
Author Edmund Cohen Published December 18, 2014
Investment in passive funds has grown from £17 billion in 2004 to £80.6 billion today, boosted by regulation and the global recession. Compared to the 1% fee charged by active investment managers, passive funds charges are often around 0.2% and can be as low as 0.07%. As passive Exchange Traded Funds (ETFs) and unit trusts grow, outflows from active funds and inflows into passive funds are likely to follow. How will traditional investment managers survive?
Published December 17, 2014
Lots of Questions, Plenty of Opportunities With Christmas fast approaching it is traditional to reflect on the past year, sharing nerve-wracking stories of compliance deadlines hit with seconds to spare. But at our latest client-briefing breakfast, held in December 2014 at Capco’s new London office, we decided to dive headlong into the next big challenge looming large: MiFID II. We were joined by over 30 people from nearly 20 firms, trade repositories and vendors. The event was highly interactive, with plenty of debate from the audience.
Author Dan Jones Published December 15, 2014
Creating engaging customer propositions demands an operational structure that is fit to support. And the key word here is support. No operational design that credibly promotes itself as customer-centric at heart can be technology led. So what is the advantage of having truly customer centric operations? It’s a double win, for tomorrow (flexibility and future proofing) and today (true customer relevance). Tomorrow, systems designed and built with agility and flexibility in mind will be ready to accommodate the changing demands and preferences of customer without major re-engineering. Today, they predictably support service based on a deep-rooted understanding on what makes your customers tick. This, finally, is the ‘Holy Grail’ of technology that actually reflects and enables the business that is paying for it. Often, when supporting rapid proposition development, the challenge is to implement operations quickly and without employing an army of back office staff, along with expensive new systems. The good news - in our experience, this can be done.
Authors Alexey Sulima , Christoph Ferstl Published December 10, 2014
The financial industry has a great interest in estimating the equity return volatility. But given the wide range of estimation techniques available, how do industry practitioners decide which to use? And which estimator is reliable?
Author Nic Parmaksizian Published December 08, 2014
How does a new bank (or any bank) attract and then keep its customers? Offering the lowest savings rate or the longest balance transfer deal may work short term. But can lasting loyalty be embedded through tactical attractors alone? And how does a challenger bank grow their customer base and their portfolios through the art of cross-selling? The answer is simple – create an eco-system. At the heart of every challenger bank’s offering should be something to make that proposition ‘sticky’ - a unique aspect that represents the brand values. The brand in question could be luxury, recognised all over the world and renowned for unrivalled customer experience. It could be a local community brand that focuses on ‘down to earth’ service, based on intimate customer knowledge. In both cases, the DNA of success is the same. And the route to effective cross selling may well lie in a rewards-based customer loyalty scheme, embedded within the bank’s core.
Published December 05, 2014
Wealth management is increasingly seen as a profitable new arena for non-wealth firms. While technology companies are the obvious candidates to branch into the wealth management space, media companies that are known for their print journalism are showing signs of taking the lead. Will print journalism, seen by many as a rapidly declining industry, sustain the move into wealth and gain the status of a regulated advisor? Both technology and print journalism have loyal customer bases and strong brands. But print journalism has the additional advantage of being able to avoid some of the privacy concerns associated with large technology companies.
Published December 03, 2014
Author Christopher Geldard Published December 02, 2014
Financial Inclusion. Does it matter? (A great deal.) Is it worth fixing? (It is a global imperative.) And will mainstream banks ever really be a part of the solution? (Yes. With the right approaches.)
Author Sarah O'Callaghan Published December 01, 2014
Historically, rates have had precedence as the lead value of most financial propositions. Branding has taken a back seat, or not had a seat at all. Today however, transformational change, explosive change even, has impacted the market. Customers have more touch points with banks than anybody would have thought possible even a few years ago. Now, a traditional industry has come to a very contemporary realisation: fail to build your brand, or worse still, lose its meaning to your customers and relevance to their lives, and there will simply be nowhere to hide.
Published November 28, 2014
Risk management has been transformed beyond recognition in the past few years. The regulatory wave unleashed by the 2008 financial crisis has created a need for a new layer of operations for implementations of these legal requirements. Most banks are already improving their operations by throwing teams at the ‘deep end’ of run-the-bank and change-the-bank functions. I believe they should be diving deeper.
Published November 27, 2014
A once slow-moving market is changing at an ever-increasing speed. Snapchat, the popular photo sharing app, has announced a partnership with Square to offer instant P2P mobile payments.
Author Adam Davis Published November 26, 2014
The financial crisis. Memories of the worst of it may, just, be starting to fade. But its legacy is likely to be felt for decades, through the reshaping of the banking landscape. We all know the key features of change; Regulation has hardened and proliferated
Published November 24, 2014
To add a level of complexity, regulators have increased the volume of rules and guidance in recent years and many of these now overlap and can, on occasion, conflict with one another. Moreover, banks are no longer confined to liaising with a single regulator - compliance now involves dealing with domestic and foreign authorities. Regulators from all over the world continue to issue fines and censure individuals and companies in relation to compliance failings.
Published November 21, 2014
Until recently, insurance companies have escaped the scrutiny of global regulators, while banks carried the burden for the 2008 financial crisis, adapting to a torrent of reforms.
Author Kyle Marynowski Published November 03, 2014
Traditionally, Mass Affluent households have proven to be an enigma to Wealth Managers. This segment requires a new approach and fresh thinking to unlock investment opportunities. Capco believes that it is the first company to offer a comprehensive, yet flexible solution, to develop and retain that business segment well into the future.
Published October 23, 2014
AML. Dodd-Frank. OTC Derivatives reform. The Volcker rule. Basel IV. FATCA. GATCA. The list goes on but the introduction of new local and global regulations shows no signs of abating. Against this backdrop, financial institutions in APAC must ensure that they are promptly informed of evolving regulatory obligations. But an understanding of these requirements is just the beginning of a wide range of resource-intensive activities that financial institutions in APAC are undertaking to break free of the regulatory shackles.
Author Peter Springett Published October 14, 2014
We’re debating the impact of cost to trade and success strategies at Banking Reloaded Conference on October 29, New York. Don’t miss this chance to meet the experts and find out how to reduce costs and boost profitability.
Author Mark Reeves Published October 13, 2014
In this concluding blog in our series on changeSourcing (CS), we ask – and answer – four of the most frequently asked questions.