John O'Hara

The post-trade space still suffers from ‘chronic inefficiencies’, but fintech can be the enabler that leads to improvement, says John O’Hara, CEO and co-founder of Taskize

What does Taskize bring to the post-trade space?

Taskize is designed to address the instances when straight-through processing (STP) fails and manual intervention is required. Tens of thousands of queries and issues arise every day, all of which require some form of human intervention to resolve. Resolution is not as straightforward, as transactions often involve complex multi-party relationships further complicated by outsourcing, offshoring and headcount pressures. This, combined with regulatory demands for shorter settlement periods makes the current method of resolution both costly and risky.

Taskize helps the financial services industry make work flow by enabling clients, colleagues, and counterparties to address manual interventions efficiently, intelligently, and securely. It offers the industry a standard mechanism to collaborate globally to connect with the right people to manage exceptions. The platform is easy to deploy and a cost effective solution that streamlines the handling of manual interventions, improving operational efficiency while mitigating the risk and cost of delayed settlement.

What are the ‘chronic inefficiencies’ in the custody space? How can they be addressed?

A number of processes in the custody industry remain highly manual, with costly overheads and chronic inefficiencies, and this needs to be rectified in the immediate term. Nowhere is this more evident than in the post-trade space where manual interventions around corporate actions, trade settlement, clearing and reconciliations continue to dominate.

Today, the pressure on firms to standardise and automate back-office tasks is reaching breaking point. Largely, the pressure stems from regulatory drivers, not an increase in transaction flow, meaning that extra budget to quickly facilitate process improvement is limited. Overwhelmingly, the aims of regulatory reform—greater transparency, stability and efficiency—represent a significant squeeze on resources.

It is critical that financial services firms collaborate more to create efficiencies and systematic cost savings. This will require a considerable amount of work to be done, but the long-term benefits of collaborating now, rather than waiting, will be enormous. Streamlining costs—be it through outsourcing, offshoring or introducing productivity-enhancing technologies into post-trade areas—should be a focus for financial institutions.

Standardisation can take a long time, so it is crucial the industry works now towards achieving a degree of uniformity in post-trade. Any solution must be implemented incrementally and thoughtfully, with minimal disruption to legacy systems and processes. It is crucial that this evolution takes place with due consideration to prior investments in a way that does not require continual system rebuilds as the landscape evolves.

Are disruptive technologies the best way to improve efficiency? What are the alternatives?

While a lot has been achieved in standardisation and STP, there is room for incremental improvement before resorting to disruptive technologies.

Financial services firms need to look beyond traditional approaches to consider how fintech-based solutions can tackle today’s problems. Fintech should act as an enabler for established financial services firms, not just a disrupter. The adoption of new technology by established financial services companies is not always about disrupting, but can also be a solution to a pressing industry challenge.

For example, within investment banking, revenue opportunities have reduced, while regulatory requirements such as capital and leverage constraints imposed by Basel III and other regulations are putting significant pressure on operational processes, data requirements, and costs. Regulation is also creating more significant consequences for operational failings.

In this environment, established players are looking to new solutions that work in tandem with their existing processes and systems, rather than completely disrupting their operations. They are also looking for solutions that will not require significant investment to replace legacy systems in a cost-constrained environment. We work to complement existing processes and to develop a system that is straightforward to deploy and that solves an existing industry challenge, with enhanced control, greater efficiency, reduced risk and greater client satisfaction.

These utility-lite solutions based on the collaborative, analytics-focused technologies that have already revolutionised other industries are emerging, offering opportunities to improve existing processes without reinventing them. From an operations perspective, greater control, capacity and flexibility can be achieved at low cost by empowering staff with the skills and tools to handle the inevitable outages, exceptions, and unexpected requests more quickly and collaboratively.

What kind of developments would you like to see in the industry over the next year or so?

I’d like to see greater collaboration within the industry between all parties to improve and change the way banks operate. Fintech can make a big impact where there are direct peer-to-peer transactions.

We’re seeing a few different technology business models emerging and traditional financial services firms are evolving their business models, looking outside of their own IT departments and traditional industry vendors for innovative solutions. Innovation is occurring across the financial services value chain, from front office to back office, and from consumer financial services to large corporates.

I have experienced some of the lengthy development projects to advance the finance industry, and today I think the new generation of IT communications and shared technology will allow for more cost effective and efficient solutions to help standardise banking operations.

I would like to see this innovation continue over the next few years, with banks being open to alternative solutions to help change the industry and improve the workflow across the financial services market.

What are you most looking forward to at Sibos 2016?

As it’s my first Sibos, I’m looking forward to experiencing the event first hand, as I’ve heard so much about this flagship event from those in the industry. I look forward to listening to the presentations on fintech and how the industry is transforming, as well as meeting with peers, clients and others in the industry to discuss how we can work together to ensure the continued success of financial services.

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