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to share middle and back office processing solutions for cleared OTC and listed derivatives. This market structure provides extraordinary value around IP, technology and staff. It reduces operational risk and cost of execution and drives efficiency. It has the potential to benefit all future market participants. We see it as a big one to
watch.” Richard Chapman, Head of Strategy for FIS’ reconciliation solutions, FIS
“For me, 2016 was the year when it was realised that in the retail banking market, while digital currencies aren’t going to take over the world, digital and mobile banking and payments are doing so, helped by the focusing of the FinTech world on solutions that are easy to use and low cost. But it was also the year when security was more threatened than ever before, with the worst case being the compromising of Tesco Bank’s security – the worst nightmare for any bank. The implications of this breach are interesting – that to be a serious player in banking you must be big enough to deploy the latest and best technology and to have a brand that is strong enough and trusted enough to weather the occasional shut down when a risk is identified. Banks’ roles in looking after our money has been somewhat underrated in previous years, and we mostly expect to get it for free, no matter how much it costs to see it safe.
As an economist, the other big story for me is politics, whether in the form of Brexit or regulatory fines. There is
no doubt about the contribution made to the British retail banking market lately by our Spanish friends, Santander and Sabadell. I’ve always rated the approach of Spanish banks to basic banking and marketing systems and to straightforward customer management. It has always been very grounded in reality, as our UK-based banks have finally learnt to be. Sadly, the water is still terribly muddied by compensation issues so many banks are still paying out for past havoc wreaked upon customers.
So, I see 2017 as a year of consolidation, with hopefully no new sins revealed. It will also be a year when Brexit scares are laid to risk, as it is revealed that trading between the EU and the UK, whether in goods or services, is not just determined by what governments want (if it did, our trade with the EU would be much bigger than it actually is), but by what customers want. Solid, customer-focused systems delivering increased ease of banking – using all real and digital channels – without fear of being sold the wrong things or of compromised security, is where IT directors should be focusing and most of them already are. And – yes – I do rather like the idea that we will begin to regulate our own businesses by non-EU rules, i.e. avoiding the assumption that whenever there is a problem, a little bit more regulation will solve it. I have data protection in mind here, but there are many other
areas where this might apply.” Professor Merlin Stone, Principal, Merlin Stone Consulting
www.ibsintelligence.com © IBS Intelligence 2016
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