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Fifth Annual Cass-Capco Risk Management Conference
April 19, 2012: Cass Business School, London, UK

The fifth annual conference of the Cass-Capco Institute on Risk brought together practitioners and academics to discuss how risk can be managed to lessen its impact on business and economic growth... Read More

Banking in the “Glocal” World
March 1, 2012: Zurich, Switzerland

Swiss Finance Institute and Capco Institute were pleased to present the Inaugural Annual conference of the SFI-Capco Institute Paper Series on Banking in Zurich, Switzerland. The conference brought together leading financial experts and scholars to discuss... Read More

Banks’ Technology Response to Regulatory Changes

Installment IV: Capco Regulatory Reform Series

Traditionally, financial institutions have dealt with incremental regulatory changes through adjustments to their enterprise-wide regulatory and risk management programs. As a result, each successive compliance initiative produces small changes across the entire existing architecture, including components associated with data aggregation and reporting.

With the significant changes ahead as a result of global financial reforms, this is not a sustainable approach. Instead, institutions should think of ways to address regulatory change and the need for business innovation concurrently.

Banks are already investing heavily in e-trading, single-dealer platforms, and prime brokerage offerings both for competitive reasons and as mechanisms to access trade flow in the context of the new regulations. This investment is likely to expand to clearinghouses and exchanges, with leading institutions linking channels and clearing to enhance both straight-through processing and service standards and to offset risk.

Recent regulatory changes will have several other effects on trading institution IT architectures, which have evolved over time. These architectures are complex, have multiple stakeholders and are costly to change. However, market and regulatory developments provide an opportunity for firms to simplify IT resources, with particular investments in some areas: