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Investment Banks: Beware Bespoke

OVERVIEW

Investment banks' reliance on customized, in-house legacy technologies is costing them, in an age where cloud savvy competitors use technology to achieve game-changing Return on Equity (RoE). Accenture research shows that moving to as-a-Service, cloud-based solutions could earn large banks an average of 1 to 2 percent increase on RoE, the equivalent of $1.5 billion.

Given the competitive situation—60 percent of capital markets institutions say that cloud-based entrants will challenge traditional industry models—moving to as-a-service (aaS), cloud-based solutions is a logical route for investment banks to take now, before restless shareholders begin banging the drums.

VIEW THE REPORT [PDF]

Custom systems for core business functions are no longer worth the cost

KEY FINDINGS

RegTech is upon us.
Regulators have realized they are mutual benefactors in the move to cloud—so much so that three in four banking executives agree or strongly agree regulatory concerns around cloud have been eliminated.


Prêt-à-porter processes are fueling growth.
The Fintech sector is growing, with US$15 billion in funding as of August, 2016. This growth is fueling an explosion of easy to adopt, cost-effective SaaS and BPaaS solutions. While IaaS and PaaS cloud solutions are driving much of the optimization of existing IT within banks, Software-as-a-Service (SaaS) and Business-Process-as-a-Service (BPaaS) solutions present opportunities for banks to create entirely new cloud-enabled operating models, moving traditionally in-house delivered technology and processes to as-a-service models.

RECOMMENDATIONS

Accelerate your journey to the cloud, getting it right involves a few key activities:

Cloud strategy

Assessing and defining the cloud strategy

Cloud architecture

Defining target cloud architecture and requisite target platforms, including deciding on private platform and hyper-scale cloud partners that will play within your cloud ecosystem

Future-proofing applications

Future-proofing applications by migrating strategic proprietary applications from legacy architectures to PaaS containers

Delivery methods

Developing a multi-speed IT operating model to support the investment bank’s journey to cloud, taking into account needs that will arise when introducing XaaS models alongside traditional, in-house and bespoke delivery methods

BLACK HOLE TO WHITE GLOVE

By Philip A. Davis, Henrik Olsson and Peter Sidebottom

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“Investment banks can finally cut time to trade by 25% while reducing costs and growing revenue.”

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AUTHORS

 

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Greg Napolitano        Connect with Greg Napolitano' Profile/s on LinkedIn. This opens a new window.




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