IT expertise isn’t enough The financial industry depends more than ever on technology-based applications and the related infrastructure. On the one hand, they enable the efficiency of processes to be constantly improved. But on the other, companies are under pressure to respond faster to the relentless stream of new demands. Roman Regenbogen, in charge of Technology Management at TALOS, explains why this requires not just flexibility but also foresight and strategic thinking.
Roman Regenbogen, Partner
Mr. Regenbogen, why does a consulting company need its own technology unit?
No business can run without technology these days. The more global a company is, the more it has to rely on technology support, at the very least in terms of communication and transactions. In the best case, when technology works smoothly, it goes unnoticed. But in practice, companies have to permanently adapt to new circumstances – for instance, in order to interact with customers or to be able to check compliance with new laws and regulations. This means rearranging IT-based processes, including reporting. And this is where we come in.
But you’re not an IT company – you’re business consultants!
Technology isn’t an end in itself – it’s just the vehicle to make processes more efficient. Of course, a company could simply call in a firm of IT consultants. But will they be familiar with the business processes or the regulatory requirements that need to be met? Do they know their way around the specific requirements in the client’s sector? Our teams usually start immediately at the interface between IT and the respective business unit.
How relevant is the trend towards digitization to your work?
Since digitalization is closely linked to many core processes in the financial sector, it plays an important role for companies – and thus for our work.
Give me some examples of a bank’s core processes affected by digitization.
Consider the new technical possibilities for interacting with customers. The resulting ways of making processes more efficient are enormous. You can use a smartphone to open a bank account or buy stocks and shares from the comfort of your sofa in next to no time. New customers are able to directly identify themselves via video conferencing. We’ve now reached the stage where small banks can outsource the digital account opening process including compliance checks to external providers.
Can you explain the extent to which regulations impact on your clients’ IT systems?
Our customers come from the financial sector, which in recent years in particular has had to cope with a litany of new directives and laws. Almost every process in a bank is supported by or even depends on technology. Customers’ data is recorded and stored whenever new accounts are opened. This information is continuously updated and transactions are evaluated over the years. And even when customers close their accounts, banks are still obliged to archive information on them and their transactions for several years. In order to comply with new regulations, banks have to adapt both their IT and their internal monitoring systems, and in some cases reorganize them from scratch. TALOS offers more than just technology expertise because we can also asses how the demands facing the sector are likely to develop and how they can be dealt with in the long term. We are endeavouring to develop an overarching standard enabling banks in future to respond flexibly to changing requirements.
How does TALOS proceed in projects of this nature?
When a new regulation is introduced, basically two things have to be done. First of all, existing customer relationships, products and services need to be analyzed to gauge the extent to which they comply with the new directives. We can usually tell quickly whether a bank or insurance company is able to efficiently collect and analyze the relevant data. In the second step, the processes and hence the systems must be adapted to ensure compliance with all the relevant regulations in connection with future transactions or when new customers open accounts. This also applies to the implementation of additional controls as well as internal and external reporting.
To discover our full range of services in Technology Management or to discuss your specific challenges please get in touch with Roman Regenbogen via firstname.lastname@example.org
A globally operating bank
Our client wanted to implement a new legal policy globally in the knowledge that compliance would be monitored by external authorities. During the process and system analysis, it turned out that there wasn’t yet a standard compliance framework for the implementation of new regulations like this.
First of all, TALOS conducted an analysis of the current systems and processes with all managers in key positions. The results were used to identify the gaps between the new demands and the existing processes and IT systems. A compliance concept and prototypes for control processes were developed and then aligned within the company.
To anchor the required legal standard, TALOS devised a control framework and presented it to the external authorities for approval. At the core of this framework was a control register defined for the home market. Working on this basis, work packages were derived for more than twenty international locations and the responsible staff attended training sessions. In important countries with extensive business, teams supported implementation locally. In addition, design proposals for processes and controls were submitted to all the locations for efficient adaptation to local requirements. Knowledge transfer took place by means of regular online conferences in which TALOS presented control concepts and answered questions raised by global responsibles. In addition a training concept was applied covering both web-based as well as class room sessions.
In this specific case, TALOS coordinated the global implementation of control processes and provided regular progress reports to external authorities. This also entailed the official approval of the overall operational process, for at the same time a standard for the future adaptation of the monitoring processes was introduced in the company. All the changes were carried out within the agreed timeframe and budget. Thanks to intensive support and training, the company was ultimately able to continue the monitoring processes independently.