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…)
A skills shortage has cybersecurity experts in high demand on Wall Street as firms boost their game to lure top talent. But how should firms go about recruiting the right personnel to match their needs?
A panel of experts at the recent SmartBrief Cybersecurity Forum weighed in on what they are doing to identify and recruit cyber warriors. As George Rettas from Citigroup noted, recent headlines have made an already competitive landscape even tougher as Wall Street, which is already used to competing with companies from other areas of critical infrastructure, must now compete with non-critical infrastructure companies desperate to avoid headline risk.
“It’s people like Sony, who are in the entertainment business,” Rettas explained. “They’re not even critical infrastructure. Now they are hiring the best cybersecurity professionals in the world.”
The conversation also touched on how to organize the upper echelons of cybersecurity teams. With CTOs, CIOs, CISOs, etc … who should report to whom? (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…)