With less than a week to go before A-Team Group’s TradingTech Summit London and a buzz building about the event’s sessions and speakers, we talked to James Wilson, Sales Director, Banking and Capital Markets, at Luxoft, one of the Summit’s platinum sponsors. Wilson highlights the challenges faced by the trading technology community, solutions to these problems, and why TradingTech Summit London is the place to be to hear from experts across capital markets trading technology, showcase solutions, and network with colleagues in person for the first time in nearly two years.
A-Team: What do you see as the biggest challenge facing our trading technology marketplace as it comes out of the pandemic?
James Wilson: There are several drivers facing the technology marketplace as we emerge from the pandemic. The conditions have created growth opportunities for some firms and headaches for others. Pressure arising from the catchup required on cost-optimisation programmes, which lost momentum in 2020 and 2021, and a lack of competitive innovation and differentiation investment, add to an already burdened change agenda for most financial services institutions.
Most resources, prior to the pandemic, were already weary from cost-reduction project fatigue and, in many cases, have been responsible for both BAU and change team activities. The pandemic slowed the normal rate of employee attrition and attrition has already spiked as we emerge from the pandemic, something that looks set to continue. Group ways of working, incorporating remote working and other travel changes present further challenges.
Delaying benefits arising from existing or required change programmes is not an acceptable solution, nor is ignoring competitive drivers, or hiring a permanent work force to deal with the current backlog. Clear strategies and re-planning are required to free up key resources to focus on truly differentiating and profit driven activities, while determining what location, hiring, outsourcing, and partnering options are available to deliver cost-reduction at scale.
A-Team: How do Luxoft solutions help address these challenges?
James Wilson: Over the past few years, customers have become fatigued with the constant cycle of cost reduction. In our day to day lives we consume technology as a service in almost every facet of our lives, entertainment (Netflix), exercise (Peloton), groceries (Ocado), transport (Car leasing), but within financial services there is still a focus on ‘build’ rather than ‘consume’.
Traditional financial services organisations and their partners are seeing churn like never before as people are fatigued and want to focus on delivering tangible business value rather than ‘keeping the lights on’. Luxoft has deep expertise in running managed services for clients across banking and capital markets in a more traditional model, with the technology stack hosted on-premises. As the world moves more and more to technology consumption, Luxoft is taking its proven expertise in running complex managed services for clients and expanding its portfolio to run technology end-to-end ‘as a service’.
The following model allows us to work with clients and partners alike to realise benefits including:
Lower complexity: By transferring ownership of systems to a trusted partner and consuming technology as-a-service, banks can rid themselves of the maintenance and management issues that monopolize their attention, and focus on expanding their businesses while minimizing capital expenditure.
Quicker time to market: The initial investment required to establish a DevOps or automation framework around complex front-to-risk-to-back-office platforms is usually quite significant. But today, it can be consumed as a native feature of an as-a-service solution.
Greater security: All the major cloud providers have built strong best practices around data access and security layers. By leveraging these built-in features, as-a-service solutions provide banks with high-level security standards at no additional cost.
Data insights: Bank data is typically spread across several systems, so making the most of the data through end-to-end reporting and insights can be difficult. By innovative use of scalable cloud infrastructure and offerings, many as-a-service providers can consolidate and produce insights based on artificial intelligence (AI) and machine learning (ML) models. Taking a data-centric approach and standardizing interfaces between cloud-hosted as-a-service offerings can make data more widely available and usable for enhanced data insights.
Lower cost, increased transparency: Many of these benefits help banks lower the total cost of running systems and operations. More importantly, they provide cost transparency so organizations know exactly what they’re paying for and can scale up or down to meet business needs while attributing costs directly to the business lines driving demand changes.
Faster cost-to-revenue conversion: Instinctively, people might think that bespoke development projects and systems are an essential part of meeting the specific requirements of each bank. But the reality is that once a trade is confirmed and booked, the post-trade lifecycle is pretty similar regardless of the underlying business, whether that’s an investment bank, buy-side, sell-side, treasury or commodities business.
Interconnection and collaboration: The increasing level of standardization enables banks to open their platforms to other banks and financial services organizations, sharing costs and creating new revenue channels.
A-Team: How can firms address the skills shortage that is currently hindering progress in the field?
James Wilson: To address such challenges, many firms draw on organisations with the reach to attract and develop the right skills, experience, and capacity where they are required in the world. Firms use such partners not just for addressing tactical resource challenges, but for strategic and operational change programmes, as well as freeing up key resources to focus on activities that directly contribute to revenue and profit driving business differentiation.
We recognize that many of the skills required in today’s capital markets organizations are niche and may not exist in the volumes required to keep pace with the rate of change, which is why firms need to invest in talent. Investment must be across all levels of the organization. We see a great way to fill the near-term skills shortage and provide long-term capacity through investing in graduates and academies. Luxoft resource investment focuses on:
Attracting the best graduates: Investing in securing the best graduates and providing them with the in-demand skills to succeed builds a pipeline of the resources you need with the scope to grow them into future subject matter experts and leaders.
Investing in academies: Here, experienced professionals from parallel sectors are the source talent pool, and provide the niche technologies, application knowledge and experience demanded by clients.
Structured learning: Investing in business domain knowledge through structured learning pathways, on-site education and mentoring to allow all staff to better understand their client’s business.
Competing for the same resources as other organizations only leads to cost inflation. Developing and deepening the talent pool by hiring, training and retaining the best people is required.
A-Team: What will Luxoft speak about at our upcoming TradingTech Summit?
James Wilson: We will talk about the modernization and transformation of the financial services technology marketplace and the role of system integrators (like Luxoft) and technology suppliers to work together to offer clients clear options for streamlined, operationally efficient and dependable solutions. We will also cover the evolution of business operating models alongside technology transformation and modernisation, and how this is critical to the success of future transformation programs that previously struggled to deliver on envisaged business benefits.
A-Team: What does Luxoft see as the benefits of sponsoring the TradingTech Summit?
James Wilson: We are looking forward to connecting with other leaders and experts from across the capital markets industry at this year’s Trading Tech Summit. After two years of remote working, this in-person event presents a great opportunity to network in person with our peers, and showcase the evolution of our solutions and offerings to clients and participants.
If you would like to hear more from Luxoft, be sure to book your ticket for TradingTech Summit London, where you can learn more about the company and hear from many other industry experts. You can check out the event speakers here.
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