Helen Johnson, head of business development at MYRIAD Group Technologies, discusses the immense challenges associated with initiating an in-house build in today’s market
A benefit of choosing a third-party, rather than taking the internal build path, is that unit and system testing responsibilities are also not required in-house, freeing up resources to concentrate upon user acceptance testing and speedier implementation. This gives opportunities for clients to dedicate their time and resources to more value-added activities, for example setting up their bespoke workflows, invoice automation and reporting, all of which realise increased processing efficiencies and cost reductions.
Most importantly, once an application is in place, it needs to be supported, maintained and upgraded throughout its use. Again, this is where a third-party application can take the strain of business-as-usual (BaU) requirements.
Dedicated, experienced support teams, both on the technical and client operations side, will be committed to supporting and upgrading the product. Clients should be the primary focus from implementation through to BaU.
Where a client has a new requirement, the vendor must collaborate with them to achieve their request and make it available to all other clients, ideally at no extra cost. Needless to say, the in-house build would require additional budget and resources, and the business units would still need to fund the annual in-house support fee.
From a vendor’s point of view, ensuring data privacy and robust information security is paramount to their offerings. Vendors will ensure that their solution meets the toughest of security requirements, where any security weaknesses are remediated with speed and precision in order to satisfy their clients’ rigorous security assessments; realising this is a critical requirement for the approval and ongoing due diligence of a third party offering.
Many vendors ensure they are properly accredited and prove their levels of control and oversight, dedicating time, effort and resources to achieving ISO certification, affording clients an important degree of peace of mind. Although a bank will have its information security controls in place, its in-house solutions are not ring-fenced in the same way, whereas the software provider will be able to demonstrate a dedicated IS framework applicable to the company and its products.
Operational resilience programmes are positively affected by the implementation of a third-party solution, ensuring data is readily available, something that the pandemic highlighted as a particular concern. Some institutions were still relying upon hard copy records, their disparate platforms exposing low levels of integration, weak security data integrity and poor access control. Integrating with a dedicated, external platform remediates all these areas of weakness and potential risk, whilst leveraging the client’s data.
A vendor always needs to focus on the future of their product and must anticipate the requirements of their clients and their prospects, and what they will be over the next 10 years, ensuring there is a plan to fund and deliver. As well as keeping up with their competitors, vendors need to listen to the market, identify where the pain-points are and ensure that these are addressed in their strategies. In-house administrators do not usually have access to the industry and its opinions, or even the time and budget to keep pace. Requests for changes are left for the users to initiate, with budget approvals and resource requirements included. Using a third-party solution will get you where you want to be quicker.
MYRIAD Group Technologies (MYRIAD) is very much on the front foot as it innovates for the future. Plans are laid out and fired up for our MYRIAD (Network Management) and CODUDE (Due Diligence) ‘Next Gen’ products. These developments are concentrating primarily on processing efficiencies, elevated cost management and enhanced risk management capabilities for both the buy- and sell-side — addressing controls for financial institution relationships and vendor management.
Existing clients will automatically benefit without a painful budget, approval, and development process — keeping up with the industry, but without the stress. As an example, the Association for Financial Markets in Europe is preparing to publish a structured excel format as a resource for the first time, to further standardise the annual industry due diligence process, where the same responses and format can be loaded by the agents and sub custodians into multiple tools.
MYRIAD are there to assimilate this resource, advise the market and execute upon it immediately. Extending upon current functionality, it represents a tremendous saving of budget and resources for financial institutions which cannot effectively build or maintain such development at such a rapid pace, and at such a low cost.
In-depth examination of development costs must surely trigger alternative thinking about how these may be mitigated, or eradicated. Since so much of it cannot accurately be forecast, wisdom would suggest exploring a new direction with specialist software.
For many chief information officers, the blanket of a fixed cost, off-the-shelf solution significantly outweighs the unpredictability of a variable cost associated with a build — or it should! Speak to MYRIAD if you would like to find out how our SaaS products can help.
