FINspeak

(versión en español del comentario anterior en inglés)

En España el concepto de "off-shoring" suele asociarse con el de "Factorías de Software". Si bien ambos tienen mucho en común, el "off-shoring" ofrece todo un mundo de beneficios adicionales.

Las Factorías de SW existen en España desde hace muchos años. Las Factorías han generado beneficios en eficiencia y calidad, sobre todo a partir de la "industrialización" de los procesos y la estandarización de las tareas. Estos permiten el uso de personal menos especializado (de menor coste) para llevar a cabo las partes repetitivas del ciclo de vida SW. La rentabilidad ha aumentado recientemente por el uso de localizaciones remotas, especialmente en América Latina.

Sin embargo, hay mucho más en "off-shoring" que la industrialización y el arbitraje de costes laborales. Aunque estos dos beneficios impulsaron el su crecimiento inicial, cada vez más empresas en EE.UU., Reino Unido y el norte de Europa están cosechando beneficios estratégicos del "off-shoring", confiando las partes más importantes de sus negocios a proveedores de servicios globales:

-          Acceso a los Mejores Recursos a Nivel Mundial - A diferencia de los proveedores locales con interés por colocar sus recursos locales, los proveedores globales asignan a sus proyectos los mismos recursos que han trabajado para los líderes mundiales de cada sector. En particular, los profesionales de los proveedores de la India no son aquellos que han elegido la "factoría" por no tener acceso a opciones mejor pagadas. Son los mejores de su promoción, que compiten por trabajar en la industria tecnológica, en un arduo proceso que escoge al 1% de los candidatos. Esta diferencia cualitativa se nota claramente en la calidad entregada.

-          Acceso a Mejores Prácticas Globales - Los profesionales de los proveedores off-shore aportan experiencia en empresas de primera línea de su sector. Un recurso de una empresa off-shore trabajando para un banco español, es probable que haya terminado hace pocos días un proyecto en un banco líder de Wall-Street, o una de las principales casas de valores de Londres. Esta experiencia mundial es un excelente complemento para el conocimiento local de los proveedores habituales

-          Innovación Impulsada por la Diversidad - Inicialmente puede costar un poco acostumbrarse a trabajar con personas con diferentes antecedentes culturales, prácticas de trabajo, o nativos en otros idiomas, como el Inglés. Sin embargo, el pequeño esfuerzo inicial puede servir para desatar la creatividad y la innovación tan necesarias actualmente en la industria en España, contribuyendo así a la tan deseada internacionalización de las empresas españolas.

Posted by Guillermo Falco at 3:12 PM | Permalink | Comments (0) | TrackBacks (0)

At the very onset I welcome you all to the wealth management blog. This being the inaugural post, I would like to introduce this much talked about topic at a high level.

"Accumulate, grow, protect and spend" these 4 words sum up the wealth management processes in a nutshell. WM progresses along the life cycle of an individual to cater and adapt to his/her requirements at each junction.   The importance of WM has only increased with the standards of living improving worldwide. People are now looking at WM to help them plan early retirementsJ, sustain their lifestyles, account for all important milestones of life and facilitate inter-generational wealth transfer. Also with global economies opening up, WM is used by many as a tool to invest and hold cross border investments which are typically difficult to manage on a "do it yourself" sort of mode, as it requires expertise in regulations and taxation policies worldwide.  Hence investors are largely now moving to "Do it for me" mode. This basically means that investors are looking for "Global Life cum wealth advisor" and not just a regular "Financial advisor".

Over the past few years WM has evolved from being something which was catering only to the needs of the "RICH" to an offering which is now offered to all socio-economic classes starting from the Affluent to the ultra high network individuals (UHNI's). The recent market downturn has shifted the focus back on WM with a special spotlight on "Wealth Protection". My interactions  with individuals/advisors  post the recession has led me to believe that individuals are still very cautious of putting their money in complex products which they don't understand  ( Hedge Funds, are the best example here) and are increasingly looking for products which are simpler to understand, trusted and offer capital protection.  And the price skyrocketing prices of bullion (gold being the perfect example) seems to validate my theory here!

Change is the only constant and WM practices are a live example!!

Stay tuned for much more exciting stuff here!!!

Posted by Navdeep Gill at 9:30 AM | Permalink | Comments (0) | TrackBacks (0)

In Spain it's very common to associate the concept of "off-shoring" with that of "SW-Factories". While these have much in common, offshoring offers a whole world of additional benefits.

The SW-Factory service has been around in Spain for many years. The factories have delivered benefits in the form of lower costs and higher quality, mostly from the "industrialization" of processes and the standardisation of tasks, which allows the use of lower-cost resources to perform the repetitive parts of the SW life cycle. The cost benefit has recently increased further by the use of off-shore locations especially in Latin-America.

However, there is much more to "off-shoring" than industrialisation and labour arbitrage. Although these two benefits drove the initial growth of off-shoring, increasingly corporations in USA, UK and the North of Europe are reaping strategic benefits by trusting more important parts of their businesses to global service providers.

-          ACCESS TO THE BEST GLOBAL RESOURCES - unlike incumbent vendors with a vested interest in staffing their large pools of local resources with local experience, global off-shore providers staff the same resources that have worked in the prime global corporations in their industry and area of specialisation.

-          ACCESS TO GLOBAL BEST-PRACTICES AND BUSINESS PROCESSES - these resources bring in the expertise from the prime companies in their field. A banking professional from a global off-shore provider is likely to have finished just days ago an assignment in a leading Wall-Street bank, or a leading London securities house. This global experience is a much welcome complement to the local experience from incumbent vendors

-          INNOVATION DRIVEN BY DIVERSITY - although it takes some getting used-to, working with people with different cultural background and work practices, and in other languages like English, can unleash the creativity and innovation much needed currently in the industry in Spain

Posted by Guillermo Falco at 1:47 PM | Permalink | Comments (0) | TrackBacks (0)

A few days back, my boss asked me.... (Argghh!!...Let me stop myself right there! Are too many people using this line? Hmm.... the bosses get the brightest of ideas, after all)..."Have you ever thought about how a ship or submarine's damage control mechanism works?" What resulted is one of our finest implementations yet.

Traditionally, in the OpRisk world, the loss from a risk was thought of, as being one isolated event (say loss of revenue from system downtime). However, the reality is much different, take for instance, rogue trading, which in many a case, has resulted in a series of losses before being unearthed. The key to effective control is to monitor and react whilst ensuring there is always a fall back for worst case scenario. The biggest risk is being blithely unaware of a looming vulnerability. Let's take the popular instance of laptop theft - sure, data encryption could be prescribed and implemented, physical security beefed up; but that does not rule out the possibility of laptop going missing or data remaining unsecure. In this case, even if invoking access prevention, remote data purging etc fail, the business could make arrangements to reduce or eliminate some costs, say legal (eg: data confidentiality).

In this context, we created a concept, "Contained Damage" which is also an integral part of our risk management platform. Imagine an entire gamut of systems working like a neural network - slightest signs of trouble sensed, impact points delineated (by process maps), damages estimated (using algos), slew of preventive mechanisms kicked in (based on criticality of impact areas and predicted losses) and relevant people notified. (I'll save how this works, for a later post). Contrast this with a vessel - a series of 'flood gates' are activated on impact and damage is contained to a small portion between two gates. When one gate fails, the next provides resistance, still limiting damage. Meanwhile sirens blare and parallel evacuations ensue.

In short, be aware of vulnerability, contain the damage, have a safe 'wrangle out' strategy.

Have you ever thought of it this way?

Posted by Vikram Srinivasan at 4:42 AM | Permalink | Comments (2) | TrackBacks (0)

"Comply or Die", believe it or not, is the name of a thoroughbred racehorse and was the winner of the 2008 John Smith's Grand National at Aintree Racecourse.  It pushed ahead at the last fence to win from the leading horse.  Bookmakers William Hill conceded that his victory had cost the chain 7 million GBP.  Well, we are certainly not here to discuss horse races but this trivia does carry an important point, apart from the interesting name of the horse.

But before we start the discussion, a warm welcome to this blog where I will be looking at important developments in the Financial Risk & Compliance space.   I intend this post to be the first of many looking into this much discussed topic from a different angle.  The current world economic scenario is such that no organisation can afford to be caught on the back foot, especially with regards to the sphere of Governance, Risk & Compliance, which has captured the attention of everyone involved in the high stakes game of world finance.

Regulators around the world have always been in a dilemma as to how much the financial sector should be controlled.  Too many regulations and the business is stifled because money begets money.  Too little of the same and things spiral out of control before you can even say "Credit Default Swaps"!!! 

Similarly financial institutions are in a conundrum as to how to stay afloat and beat the competition, while ensuring that one does not step on to a minefield and lose a leg or two.  Tightening margins and an insatiable appetite to move ahead of others has pushed institutions and individuals, controlling huge amounts of monies, to the brink of taking risks too big for their palate.  Carrying forward from the horse race example, such risks can pip you at the last fence and probably cause you to fall from a fantabulous position of unimaginable returns to depths of ignominy.  A high profile investment bank which had braved through the recent recession with record breaking profits (when others were crashing out) now finds itself in huge trouble.  Does this mean being "ultra-conscious" is the only way to survive?

As a financial institution we are left with no choice but to comply with the myriad regulations which govern our world or die a swift death.   But the solution does not lie in guarding the front door while the thieves are escaping through the back door.  The solution lies in ingraining a culture of "Risk & Compliance" awareness throughout the organisation.  People have to be made individually responsible for their respective interaction scenarios.  Such delegation and decentralisation of Risk Management instils a sense of accountability with each and every employee of the organisation right from the CEO to the teller in a branch.

The awareness should flow from top to bottom but the responsibility lies in the hand of each and every employee and should flow from bottom to top to integrate the entire risk and compliance practice within an organisation.  The integrating force has to be exceptional and the only way this can be achieved is through technology.  Technology can help you in decentralisation, delegation and integration at the same time.  Each and every individual person in the organisation, although belonging to varied (and sometimes totally differing) units can be connected to bring about a holistic view of the entire risk the organisation is facing. 

I will be thinking along these lines in the coming posts which I believe will help us in looking at risk and compliance not only in terms of specific parts but also holistically. So let us saddle up and get prepared for an interesting race which we surely have to win.

Posted by Godwin George at 4:15 AM | Permalink | Comments (0) | TrackBacks (0)