As the Financial Markets evolved many organisations have become everything to everyone within their client base with varying degrees of success and profitability. For some organisations to understand the clients or products that are most profitable it has become almost impossible to ascertain. Whilst Collateral Management started as a cottage industry it can now determine the profitability of a client, transaction or organisation and has become so complex understanding the total costs and profitability of a client has become a mysterious art.
Therefore it has become more important to understand where profits and cost are generated and at the granular level of the client across the total span of a transaction. Whilst there is data available to identify the profitable and loss making areas, most of it is simply not in a format that allows anyone to ‘Mine’ it in a meaningful way. As a result the management cost of operating the business has become increasing high, and with a lack of meaningful data it can have a huge impact on any prospecting or client facing initiative.
The issues are further compounded as the industry changes and offers different or higher levels of service to clients who are demanding different ways of doing business. For those clients who feel they are not getting the service level they demand, will move elsewhere and worse still those who are a getting a service that does not make you a profit remain. And quite perversely, even though many organisations have focused more and more on the front office. As markets evolve further you may need to offer either a menu of concierge services for those who are your most profitable and for others a technology solution that serves their needs; whilst minimising your account management and transaction costs.
Without full time costly analytical and technology personnel the resources to plan and create such changes are either too prohibitive or not available. Meaning that many carry on and are either fortunate to craft a profitable business, without knowing why, or discover losses after the event.
Without identifying the profitability of clients or the cost of doing business it is hard to understand how which processes or systems should be re-engineered if at all or how clients should be managed. Thus a critical initiative aimed at improving profitability or customer satisfaction never starts.
To embark on such a critical programme an organisation has to have access to resources that combines experience from a number of disciplines including Analytics on Collateral Management and Client Management, Regulatory Reporting, Banking Processes and Technology. The process is two fold, firstly to assemble the skills and then to create meaningful change that is focused around a Target Operating Model which increasing in today’s Financial Markets environment is client centric. The other part of this of course is to simplify processes round the Target Operating Model, as mentioned before many environments have evolved, rather than being planned and therefore there many business and operational benefits can be achieved. Meaning an organisation can benefit from the constant change and ensure that resources are focused on client front office activities.
Better Collateral Management itself can give major benefits around such matters as counterparty credit risk or margin calls whilst adding a focus around the client can mean higher customer satisfaction and profitability not least by less leakage of clients you wish to retain. Whilst simplifying processes can improve ‘Time to Market’ of new client initiatives and the ability to cope with higher or lower volumes or change as new regulatory requirements are imposed.
aSource Global can provide to the resources to assist with consultants who have knowledge and experience of previous programmes. The experienced consultants can assist by putting to use tried tested methods and process with a practical approach in all areas that need attention, whether Front Middle or Back Offices. Whether it is to add to an existing team or project or to provide a complete programme at inception or implementation (normally a 6-8 week period) aSource Global can offer a cost effective solution.Our Services