Capco Blog

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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?

The content and opinions posted on this blog and any corresponding comments are the personal opinions of the original authors, not those of Capco.

Author: Tom Riesack
Published: September 23, 2014

On August 11, 2014 the European Securities and Markets Authority (ESMA) published a Consultation Paper (CP) on clearing obligations regarding Interest Rate Swaps (IRS). Forty-six affected market participants responded to the CP expressing their views on the introduction of obligatory clearing of specific IRS OTC derivatives via central clearing houses (CCPs). What follows is our analysis of the respondents’ comments. The analysis indicates that asset managers, banks, CCPs and regulated markets appreciate ESMA’s initiative, but concerns remain about frontloading requirements, implementation timelines and classification of counterparties.

Quantitative results of the industry responses to ESMA’s consultation paper on IRS clearing obligations are as follows:

Author: Mark Reeves
Published: September 21, 2014

“Changing change” is something that financial institutions need to do. Urgently. So far in this blog series, we have seen that regulatory response needs to be balanced with commercial development. We’ve also seen that change projects present banks with a broad spectrum of challenges. These can be both disruptive and difficult to predict sufficiently in advance to avoid pinch points and pressure on resources.

That, in summary, is the “headache”. We have also posited that the “cure” lies in a new approach that structurally re-engineers the entire approach to the change function itself. So, are we talking outsourcing here? After all, many of the run the bank functions, such as back office and infrastructure, have been outsourced successfully and for some time now.

Author: Markus Sander
Published: September 18, 2014

Everyone’s talking about the brave new world of payments. The mainstream press and even my family seem to know about everything from mobile and peer-to-peer payments to crypto-currencies.

But who’s actually using them?

In this four-part blog series I’ll be sharing my personal experience of new mobile payments solutions from scanning QR codes at the checkout to the latest virtual currencies.

First up is a new service that enables customers to pay for goods with their mobile phone. Introduced by REWE, a large German supermarket chain, it requires end-users to download an app to their smartphone.

Once all your groceries have been swiped, you can select the ‘pay with mobile option’ on the POS terminal and then scan the QR code that comes up. What's so surprising is that the app was launched with no advertising at all and appears to be aimed at a small ‘early adopter’ audience. There are instructions, but they are only available as part of the app. Don’t expect any guidance at the checkout.

Author: Isabel Naidoo
Published: September 16, 2014

“Choose a job you love, and you will never have to work a day in your life.” Confucius

Work-life what?
The divisions between work and play, between professional and personal are disappearing fast. The notion of work-life balance is being abandoned in favour of work-life integration. But guess what? Work is such a major part of life for most of us, the two are already deeply integrated, whether you like it or not. The trick is to like it and make it ‘work’ for you.

Technology makes us available 24/7. Incidentally our minds and creativity are available for most of that time too. So, after you’ve worked out what you like doing, the next step is to analyse where, when and how you work the best. Then decide what is important to you and try to make it happen every day.

Author: Mark Reeves
Published: September 15, 2014

Sustainable change within financial institutions requires urgent redefinition.

Strategically, change needs to be seen as an opportunity to embrace more effective commercial practices, as well as producing acceptable regulatory responses. (No bank can succeed for long if it is no more than a “compliance engine”. It has to become more competitive as well.)

Operationally, change needs to be undertaken on a different basis. We have already made the point; bandwidth-hungry, regulation-driven change projects are eating into IT budgets. They are also tying down skilled resources and reducing capacity for other and urgently needed change the bank initiatives. Finally, they are a distraction from carrying out bank’s core business – ultimately the function on which all future success depends.

Author: Thomas Wagenknecht
Published: September 11, 2014

On Tuesday, Apple presented a new series of mobile devices, including two new iPhones and the Apple Watch. While the hardware is gorgeous, another announcement has generated a heated discussion in the financial industry: Apple Pay.

Put simply, consumers can use the new devices to make contactless payments both online and in brick-and-mortar stores. Users verify their purchase using the fingerprint-based “Apple ID”. Offline, Apple makes use of near-field communication (NFC) technology which enables users to make purchases on the move.

Consumers can transfer credit card data from their existing iTunes account or simply scan their debit or credit card with the iPhone camera. Critically, the service is backed by leading financial services corporations including Visa and MasterCard, as well as Citi and Wells Fargo.