A new study by Broadridge Financial Solutions finds that large banks could cut costs of processing trades by 40% though the adoption of a utility-type model. Sharing a range of functions such as post-trade processing, reconciliations and post-trade data, expense management and regulatory reporting would save the average Tier 1 bank $100-$300 million per year.
The new report, “Charting a Path to a Post-Trade Utility,” deals with the increasing costs of meeting new regulations and economic hurdles that cut into banks’ profit margins. “Despite significant cost cutting and restructuring post-crisis, most banks still struggle to post returns that exceed their cost of capital,” said Broadridge COO Tim Gokey. “Over the next five years, regulatory pressures are set to grow, so banks are increasingly looking to new and unconventional ways to regain efficiencies, particularly within the trade life-cycle. Emerging utility models hold significant promise.” Industry-wide savings could reach $4 billion, according to Broadridge. (read more…)
A collection of stories from SmartBrief publications and around the web…
Did the Federal Reserve’s quantitative easing do any good?: Stephen D. Williamson says no. The vice president of the St. Louis Fed takes a critical view of the crisis management measures policymakers deployed during and in the aftermath of the 2008-09 financial crisis. Williamson challenges the efficacy of the Federal Reserve’s prolonged zero interest rate policy and also believes the Fed’s attempt to improve the manner in which it communicates has only muddied the waters. But Williamson takes his biggest swing at the massive quantitative easing the Fed rolled out in hopes of boosting the economy. With the Fed’s balance sheet now swollen at $4.5 trillion, Williamson argues that the economic benefits of the much-maligned QE program remain hard to discern.
Speaking of quantitative easing…: The European Central Bank is in the throes of its own round of QE, and it looks like Mario Draghi & Co. (read more…)
The financial-services sector needs to strengthen its information-sharing network to learn more quickly of threat data and thereby stay ahead of hackers, said panelists at the recent SmartBrief Cybersecurity Forum in New York City.
Cybercriminals are colluding and collaborating frequently, which creates a crucial need for the industry to work more closely together on a regular basis, said George Rettas, managing director and chief of staff, Global Information Security Department — Information Protection Directorate, Citigroup.
“You cannot beat a network without being a network yourself. You’re not going to do it alone,” Rettas explained.
Al Berg, chief security and risk officer of Liquidnet Holdings, said information shared by other organizations “can be a force multiplier for us, because we don’t have to redo that analysis.”
Karl Schimmeck, managing director of financial services operations for the Securities Industry and Financial Markets Association, said that his group and the industry has spent a decade developing relationships to share information through the Financial Services Information Sharing and Analysis Center, or FS-ISAC. (read more…)
Cybersecurity is at the top of the agenda of nearly every board of directors meeting on Wall Street. As the threats evolve, so to do the countermeasures. Firms are deploying new methods to prevent cyberattacks and recover quickly when hackers penetrate defenses. Meanwhile, a big piece of the cybersecurity puzzle lies at the intersection of industry and government, where enhanced collaboration and information sharing are starting to produce positive results.
With the above landscape in mind, SmartBrief recently partnered with SIFMA and the Financial Services Roundtable to assemble a pair of panels to talk about the state of cybersecurity in financial services. The panels focused on cybersecurity public policies — those in place and others under consideration — and the best practices current practitioners have adopted to enhance the cybersecurity of their individual firms and the financial services industry as a whole.
Below you will find video highlights and a brief description of each panel. (read more…)
Collaboration between the financial services industry and government entities has increased in response to rapidly evolving cybersecurity threats, but both sides agree there is room for improvement. Experts at the SmartBrief Cybersecurity Forum in New York City on Tuesday identified increased information sharing and the enactment of legislation already making the rounds on Capitol Hill as two ways to enhance the security of today’s financial markets.
Karl Schimmeck, managing director of financial services operations for the Securities Industry and Financial Markets Association, said cybersecurity initiatives undertaken by the Obama Administration earlier this year have spurred greater engagement from a host of government agencies. Schimmeck also cited the NIST Framework unveiled in 2014 as example of the government helping industry devise best practices that can be put to use by all firms – large and small.
Chris Feeney, president of the Financial Services Roundtable’s BITS technology policy division, said government could help by harmonizing state laws within the U.S. (read more…)