Expand end-to-end capabilities
Many institutions implement process automation to control costs in line with digital-based pressures such as commission and spread contraction.
To elevate automation beyond a short-term discrete solution, new services that leverage the output of automation should be developed. Whether this is enhancing the user experience with real-time services, enabling deep integration by extending data and systems to clients, or automating decision-making by harnessing broader sets of data, automation can be a central component to improve client retention and wallet share rather than just a method of rationalizing costs.
Create meaningful analytics to make informed client segment decisions
As broader parts of the capital markets business move toward digitization, methods of client interaction will change and prompt re-evaluation of the sales approach and how to maximize client profitability.
Many institutions lack a multi-dimensional view of the client relationship due to the traditional sell-side model structured around siloed efforts to chase revenue. Mutually beneficial client relationships are now more important not only to align the degree of “touch” with client revenue but to maximize the benefits that can be shared between a bank and its clients.
As product digitization leads to commoditization, the ability for institutions to focus limited resources toward profitable growth is the required first order response. However, the ability to turn product standardization into a competitive advantage through new product development, streamlined product access, or new distribution are the second order benefits that can help reposition a firm for sustained growth.
Adapt supervision and controls to new risks
Operational risk management will increasingly need to consider the evolving nature of how products are delivered and by whom relative to the product itself. The core tenets of supervision will not disappear, but they need to adapt to how the underlying business is shifting.