The perfect Portfolio Management Solution

Now that your bank and employeer has lost several hundreds of millions in Assets and that even your job is not 100% sure anymore; it might be the good moment to take the time and think: what tools would have needed to work better back then?

Yes. Maybe you were buying shares, rebalancing portfolios of your own or your clients, and in the hectic of the everyday routine there were a lot of cumbersome processes you’re suffering or risky shortcuts you’re taking. Well now, let’s take few moments and think how would it look like the perfect Banking System, which maybe, very hipotetical maybe, could have prevented some of the wrong decisions were taken in the last two years.

This Blog would like to give a try to gather and discuss all this about…

In recent years the demand for Private Banking Services has experienced a consistent and significant growth. Although this trend is noticeable worldwide, it shows its major impact in the emerging economies or so called BRIC Countries and all its variations.
The associated business opportunities for private banks and wealth managers also face
several challenges:

  • Modern, demanding clients need for advanced solutions, advice and personal relationships
  • Banks need to participate in market growth with limited resources because they are short of qualified staff
  • Need for flexible business models to react the market changes fast
  • Need to fulfill Compliance requirements

Everybody would agree that Portfolio Management Services as critical component of any Bank Business Strategy should be supported by a resilient, technology open and scalable system. In the IBM vision no system can work isolated from others.

PM Systems are the paradigm for this postulate: they need to be integrated in complex technical and architectural landscapes, in which security and resilience are the most critical requirements.
Critical Functionality for the Business such as Client Relation Management, Investment Profiling and Advisory have to be, when not integrated in the solution, at least fully supported thru integration with other Specialised or ad-hoc Systems.

Growing constrains from the regulatory authorities requires in the first place extreme technical flexibility: Data model extensibility, supple Business Rule engines, parametric workflows are among others the key indicators for ensuring positive reactivity to new Legal Requirements.
These features will also guarantee that the selected system will not become prohibitive in terms of Total Cost of Ownership or that Time to Market of new Business Initiatives is hindered in the mid-term.

Also Clients Requirements are a challenging drive for the requirements of such a System:
Reporting Capabilities are not anymore to be treated as a “nice to have” requirement, they are crucial elements in the pricing services strategy of each Wealth Management Service. Ability to cope with longer periods of comparative data, multi-languange and flexibility to support different distribution channels are the minimal level of service.

Powerful Reporting Capabilities are not exclusive need of the High End Clients; also the Business requires access to a Management Information Services, possibly linked or combined to broader Business Inteligence Services.

Requirements from the Compliance Officer have to be met in terms of operational accountability, transaction trackability; data historization capabilities and openess to world check Databases in real time.

Last but not least, the business specific Risk Management should be addressed by analytic and optimisation tools, ability to modelized Stress Test and “what if” Scenarios, here too, only the openess of the system can ensure that the right tool can provide the right assessment at the right moment.

By reading the above description of how an ideal system “should be”, one also notices that different actors, teams and legal enitities are interacting in order to provide the final outcome for the Client. This means that different teams, departments, divisions, or companies may maintain the systems, and that means different budgets, schedules, views, and interests must be taken into account. Independent from formal structures. The solution owner is usually not in a situation where he has enough power and control to command the overall system design and behavior.

IBM specialists are well aware that such a System can’t be just bought right now or in the near future. Deep understanding of the Specific Business Needs of each area shall be associated to a Global Strategy in terms of modularity, resiliance, scalability and openess; however, these concepts should not be hardwired to any specific Technology.

SOA (Service-Oriented Architecture) is the strategical answer from IBM to the current and future challenges when Implementing Solutions for the Banking Business.

SOA is an architectural paradigm for dealing with business processes distributed over a large landscape of existing and new heterogeneous systems that are under the control of different owners.

  • The key technical concepts of SOA are services, interoperability, and loose coupling.
  • The key ingredients of SOA are infrastructure, architecture, and processes (including the metaprocess of establishing SOA, governance).
  • The key success factors for SOA are understanding, governance, management support, and homework.
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