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…)

This post is sponsored by Vertafore Sircon® Solutions.

The agent or adviser’s first encounter with a carrier is extremely important and if that experience is negative, that carrier may have just lost a customer. Implementing automation and producer lifecycle best practices aren’t easy, but will improve your agent/adviser satisfaction. Tim Owen, VP of Product Management at Vertafore’s Sircon solutions answers five questions on how to do just that.

Question: What are the existing issues with getting agents or advisers authorized to sell?

Tim Owen: Becoming authorized to sell insurance and securities products is a very complex process. It requires multiple tasks that span several different stakeholders. First, you need an insurance license and a securities registration, which involves provider and regulator interactions, and in the case of securities registrations, a sponsoring firm relationship.

The agent or his/her firm must then establish selling relationships with one or more carriers and sometimes affiliated or intermediary firms. (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…)

Certified public accountants face a range of risks that can lead to professional liability claims. Aon Affinity Executive Vice President Ken Mackunis and Senior Vice President Dave Sukert discuss how firms can mitigate their potential for liability. (Aon Affinity is the administrator of personal and business insurance benefits for members of the American Institute of Certified Public Accountants.)

Have technology and cybersecurity-related issues raised the risk of professional liability claims?

Mackunis: In the course of delivering professional services to clients, CPAs are ultimately responsible for the tools and technology necessary to complete their engagements, so if they lose or misplace their laptop or tablet, there is potential for claims from both clients and third parties. Additionally, accounting professionals have a duty to protect personally identifiable information, in compliance with HIPAA privacy laws, among others. A failure to maintain and protect private information, in contravention of laws or regulations, could result in greater risks of claims being brought against a practitioner. (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…)