Securities processing in major European markets, such as Germany, is following the trend of consolidating and outsourcing business processes to centralized external providers. In this article, Patrick Zauner and Andreas Thäwel, experts for securities processing, examine this trend and consider whether the Austrian market can expect a similar development.
Across all major banks, brokerage and post-trade processing functions have always faced severe regulatory, optimization and other challenges tied to their operating models. However, the possibilities offered by new technologies and reduced cost of trade execution on the one hand, and declining margins on the other, have raised the pressure to optimize and standardize both products and processes. This trend has reached a stage where most organizations now use one of the few standardized software products available on the market for processing their securities.
In the next wave, we expect that organizations will cut costs and headcounts in their operations divisions and partly outsource those services to a separate service entity.
The Austrian market, however, appears to be trending in a different direction, with the bundling of operations activities into internal service units, mainly within major Austrian banks. By contrast, smaller organisations have already adopted a different model, choosing to outsource existing operational activities to external utilities. The potential for the consolidation of respective internal processing units into a centralized cross-institutional utility has been on the agenda for Austrian financial services for over a decade, though no major decisions have been taken so far.
What is the future of securities processing in your firm? Read our guidelines for strategic decision-making regarding securities processing optimization.
Bodo Schaefer, Partner
M: +49 17 2131 4506
E: Bodo.Schaefer@capco.com
Carsten Hahn, Partner
M: +49 17 2213 3144
E: Carsten.Hahn@capco.com